411homerepair.com

Latest Articles

How to Protect Your Furniture from Sun Damage

Having large windows that let in a lot of sunlight can be nice. It can feel good enjoying the natural light when you are indoors. While it may feel...

on Feb 23, 2017

Build a Custom Home or Renovate Your Existing House?

There is a difficult choice to be made between building the custom dream home you’ve always wanted or renovating your current residence, the...

on Feb 22, 2017

How to Create a Great Office Space

Moving to a new office space can be an exciting time for any business. When planning a new space, you have an opportunity to create a better work...

on Feb 22, 2017

How to Measure a Window for Blinds

When it comes to getting a new set of window blinds, you have a lot to consider if you want to get the right set. Whether you decide to go with...

on Feb 22, 2017

5 Features that Will Sell Your Home Faster

A lot of people focus on things like return on investment (ROI) when it comes to updating their homes before selling. And with some returns only...

on Feb 21, 2017

Extending Your Property Lease: Compelling Reasons

by Steve Gott on Jan 30, 2013

There are several compelling reasons to extend your property lease if you are eligible to do so. Although you may balk at the cost of a lease extension, in actuality, the price you pay to a solicitor to extend your property lease is ultimately a money saving move. You will be enhancing the value of your property, and you may no longer be obligated to pay ground rent.

DISCLAIMER: This article contains a general discussion of property lease extensions. It is not intended to represent legal or financial opinion or to provide legal or financial advice. Please consult with a solicitor who specializes in lease extensions with specific questions concerning your particular circumstances.

Avoiding Property Devaluation

It is clear that a short lease almost always results in significant property devaluation. Of course, there are always exceptions. However, as a rule of thumb, the closer you are to a maximum lease limit, the closer your property value will be to the freehold value.

It naturally follows that if you have a short lease, extending it can avoid a serious devaluation of your property. While it is impossible to provide exact figures, a rough comparison is sufficient to illustrate this point.  For instance, a flat lease of 100 years has approximately the same value as a freehold. On the other hand, a lease of 60 years is only valued at approximately 60 percent of the price of a freehold.

Leasing Homes

Increasing Sales Value

Given a choice, with all other factors being equal, which property seems more valuable: a property where you are secure in long term residence, or a property for which you must expend time and effort to protect it from reverting back to the freeholder? While wealthy buyers who have access to lenders willing to approve mortgages with short leases may not be put off by a property with a short lease, many other buyers are scared off from such properties, no matter what other features they may have in their favour.

This is because many mortgage lenders set a minimum length for the lease, usually about 30 years from the end of the mortgage. This means that often, a buyer who wants to purchase your property will be unable to do so.  As a result, you may find yourself with a property that is impossible to sell.

Marriage Value

Marriage value is the difference between the value of a property with its current short lease and the value after the lease has been extended. Under the terms of the Leasehold Reform, Housing and Urban Development Act 1993 that uplift is divided equally between the landlord and lessee.
 

If you intend to purchase a lease extension, do so while the property lease has at least 80 years remaining as for properties with leases in excess of 80 years any marriage value is disregarded when extending.

Qualifying for a Lease Extension

To qualify for a lease extension, you must have owned the property for at least two years before you apply.  However, if you are purchasing a property, and you anticipate that you may want to extend the lease, ensure that the seller serves initial notice on the landlord before you finalise the sales contract. By doing so, you can receive the benefit of that notice without being subject to the two year ownership rule.  This creates a win-win situation for the mortgage provider and for you.

This post was contributed by Justin Burns for PeterBarry.co.uk - Letting Agents Oakwood. Justin has extensive experience in the real estate industry. 

Author

stevegott99

Steve Gott

Most Recent Articles

Random Articles

Cool Renovation Trends for Old Pools

Do you have an old pool that needs some serious makeover? Or did you just move to a house with a hideous one? Worry not. An outdated pool is not...

Pools / Hot Tubs / Saunas

Illinois Local Builders Associations

Find a local builder or council, please contact the home builders' association (HBA) in your area.

Builders Associations

How Expert Can You Be in Window Cleaning

You might think a sponge and a window cleaning solution will do the trick, but windows need much more than that. One might even wonder why one must...

Windows / Siding

Vermont Local Builders Associations

Find a local builder or council, please contact the home builders' association (HBA) in your area.

Builders Associations

Save the Value of Your Home with Professional Foundation Repair Services

To home owners around the globe, nothing seems to be as problematic as home foundation repairs. In fact, home repair is not only a big problem but...

Hire Contractors / Estimates

Actions

Contact Us | Submit Article | RSS | 411homerepair © 2017