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Cost of Lease Extensions - 19/01/2010

Many people who bought flats in the 1970’s and 1980’s on relatively short lease terms of 99 or 125 years may be in for a shock when it comes to the cost of extending their leases. Leaseholders have the right to extend their leases by 90 years, but the cost of doing so can jump dramatically once the expired term of the lease is less than 80 years. One of the main reasons for the big jump in costs is that valuers must take into account the ‘marriage value’. This measures the potential increase in the value of the flat arising from the grant of a new lease. ‘Marriage value’ does not apply when the lease still has more than 80 years to run. If you own a leasehold property which still has more than 80 years to run, you should look into how much it would cost you to obtain an extension on the lease term now. If you own a lease which has less than 80 years to run, you should still look into the cost of obtaining a lease extension as you will inevitably require this as and when you come to sell and/or mortgage your property. Contact us if you would like to discuss.