Lease Extension and Collective Enfranchisement
Where requirements are met under the Leasehold Reform, Housing and Urban Development Act 1993, a Leaseholder of a flat has the following rights:
- To purchase an extended lease.
- Purchase the Freehold. This right exists in common with with other Leaseholders to purchase the Freehold collectively.
A property lease is a wasting asset. This means its value in real terms reduces as the term remaining decreases. The extent of this is not fully appreciated in the early years of the lease as the decrease in value is generally more than adequately compensated for by its increase in monetary value on account of property price inflation. However, as time passes this does become more of an issue. Firstly, when the term remaining reaches 70 years or less it becomes more difficult to obtain a mortgage on normal terms which has the effect of reducing value further. Secondly, the premium increases where the lease has below 80 years left as half of the marriage value is then payable to the Freeholder.
We provide valuation advice in respect of lease extensions and collective enfranchisement on behalf of freeholders and leaseholders. We can also negotiate the premium payable.
For further information, advice and a fee quote please contact us.
