What does leasehold ownership mean?
If you buy a property on a leasehold basis, you are buying a house or flat for a certain number of years, after which the assumption is that the property reverts to the landlord, unless the lease can be extended.
When buying a leasehold property, the key thing you will need to know is how many years are left on the lease. If there’s less than 80 years’ lease outstanding, it can be difficult to obtain a mortgage to purchase it. In addition, it’s important to know what service charges, ground rents and other costs you will be legally responsible for.
The value of a leasehold interest will reduce over time as the outstanding term reduces. However, the law* gives leaseholders the right to extend their lease once they have owned it for two years. If they have a long lease, which in this context means in excess of 21 years, they can purchase an additional 90 years which is added to the term outstanding.
Our comprehensive lease extension service
If you’re considering extending a lease, then it’s very important to get the right legal advice from someone who is active in this sector. You’ll also need professional help from a surveyor who regularly values leases in order to establish a realistic purchase figure for the extended lease.
When negotiating the terms of the new lease with the freeholder, you’ll need advice on the various routes available to lease extension, so that you can make an informed choice.
At Attwaters Jameson Hill, our experienced team has the specialist knowledge required to help clients secure the extension they require. Our service covers:
- Advice on how to proceed with a lease extension
- Negotiating with the freeholder to get the legal process underway
- Help in getting a lease valued
- Agreeing and completing all the formalities surrounding the execution of the new lease.
*Leasehold home ownership: buying your freehold or extending your lease – provisional proposals announced
Under proposals announced on 20th September 2018, the Law Commission sets out ideas that could, if they are brought into law following a period of consultation, see the introduction of a new single enfranchisement regime.
Government estimates show that there are currently 4.2 million leasehold houses and flats in England. The current legal system governing leasehold properties arises from over 50 acts of parliament, with different rules governing leaseholds on flats and houses.
The government is committed to a ban on leaseholds for almost all new-build houses and wants to see ground rents restricted.
We welcome these proposals and look forward to reviewing the consultation findings when they are published.