The shorter the lease becomes, the more difficulties you will find you have in selling it. You should think about extending a lease with less than 90 years left to run. If you do not know how long you have left to run, let us know and we will help you check this.
Once the remaining lease term drops below 80 years, the lease premium (the purchase price payable to the landlord) becomes more expensive. For this reason, it is becoming more common that mortgage lenders or buyers will want a lease with 85 years or less left to run to be extended.
When the remaining lease term drops below 80 years, buyers may also want a lease extension carried out before they purchase the property – if their solicitor is prudent, the buyer will have been warned that a lease extension is likely to be necessary during their ownership, at a cost to them.
Mortgage lenders do not like to lend on ‘short’ leases. When a lease drops below 70 years lenders may refuse to lend on the property; it can make it very difficult to sell your property, as you are then limited to cash buyers who are happy to take on the property without a lease extension – such buyers are also likely to want a significant reduction in the purchase price in the knowledge they will have to pay for the lease extension themselves in the future.
As your lease becomes shorter, it will also become more expensive to extend your lease. It is therefore more cost effective to extend your lease at your earliest opportunity. Our lease extension solicitors will be able to advise you further – don’t hesitate to contact Laura Russell for further information and advice regarding your lease.