Following pressure from campaign groups, the Government has outlined plans to make it cheaper and easier for leaseholders to extend a lease.
Current rules for lease extensions
Under the current rules, leaseholders of houses can only extend their lease once – by a 50 year period – while leaseholders of flats can extend their leases as often as they like for a 90-year period. The Government proposes to add parity to this rule by allowing all leaseholders (who have the right to extend) to extend the lease by 990 years.
Abolition of the ‘Marriage Value’ to make extending a lease cheaper
The Government proposes to make it cheaper to extend a lease by abolishing the so called ‘Marriage Value’. Currently, if the remaining years on your lease drops below 80 years, the cost of extending your lease is much higher. This is because the value of the property drops for those with shorter time left on their lease. An extension to the lease, increases the value of the property, this is termed it’s ‘marriage value’. The freeholder is then entitled to ask you to pay 50% of the property’s ‘marriage value’ on top of the usual lease extension price.
Timescale for change to leasehold extension
The Government has offered no timescale for making their proposals law. The bill containing these proposals is still at the consultation stage meaning it could take years to get through parliament.
Should I extend my lease now or wait?
This will depend on your circumstances. If you are looking to sell your property in the immediate future, you should consider a lease extension as this will attract more buyers. If your lease is nearing the 80 year mark, then you shouldn’t wait as your property will be difficult to sell without a lease extension.
Lease extension in Southport
Historically, Southport has a lot of leasehold properties. If you’re interesting in extending the lease on your leasehold house or flat in Southport, speak to Debbie on 01704 532890 or complete our ‘make a free enquiry form’.