Get familiar with lease extension needs and benefits Buying shared ownership flat means you purchased a leasehold property. It means you are the homeowner for a fixed time period. The landlord and you possess an agreement called lease, which defines your rights and duties. The lease length will also be included in this contract. If the lease is short then it is hard to sell. Even trying to remortgage this home is not easy. The solution is to extend your lease.
When to extend your lease? If your lease agreement is below 75 to 80 years then it is regarded as short lease. Flat buyers in London may not be aware that they buy a lease and not the brick and mortar. Lease is diminishing asset, which decreases in value as term reduces. Extending lease in London in such condition is expensive for leaseholder and worthy for the freeholder [landlord]. With short leases flats under 80 years will be hard to sell and below 70 years may not qualify for lease extension. Moreover, the extension cost is significant and with decrease in lease term it dramatically increases. If your lease is progressing towards 85 years then start making inquiry. In the 1993 Act, 50% leaseholders of flats are offered rights to buy their freehold completely under collective enfranchisement program. Benefits of lease extension As per 1993 Act, leaseholders get an extension of extra 90 years, which means they can own the property for lifetime or the home can be sold at full market price. Collective enfranchisement also helps participating leaseholders to buy freeholder and resolve lease term issue. Visit the internet to get familiar with several conditions needed to be qualified for new lease. If possible, take professional help to smooth the lease extension procedure. Contact us if you want to know more.