| Beginner's Guide: Extending a Lease |
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Extending a lease in the UK can be a little tricky at first. But with the right guide, the right information, and the right attitude, you can find yourself quite successful in the UK leasing market. As a beginner, you need to have a clear background and the right information about extending a lease. For starters, a lease is simply renting. A lease is the right to occupy a certain property (an apartment, a flat, or a store space) over a given period of time. The duration of the lease is normally set from 70 years to over 100 years. During this time, you are known as the tenant. Although you are staying in the property, the freeholder still owns it. The information below aids to answer the basic questions you may have about extending a lease. Now, if the length of your lease is set to around 70 years, why would you want to extend it? For most people, the major reason why they choose to extend the length of their lease is they want to preserve the value of their flat, or their property. Most buyers know that can greatly affect the value of the property. For example, if your lease length is less than the duration 70 years, the value of the flat or the property may be less appealing to future potential buyers. This is because most of the mortgage lenders refuse to lend against properties with leases below a certain level, let us say 70 years. In some cases, if there are mortgage lenders that are willing to lend, they may offer less favourable terms. The second reason why people prefer to extend their lease is the ability of the property to sell itself. While there are few Wealthy home hunters scouting for a London property who are more likely to accept a short term lease, these cases are very rare. More common cases are home hunters needing assistance from mortgage lenders, and mortgage lenders refuse to lend for properties with short leases. If the property or flat you are selling is located in Acton or in Fife, more often than not buyers will be afraid and will shy away from short lease terms. Also, they may also find it a little difficult to obtain a mortgage from high street, trendy lenders. This is why most people in the UK who has a lease length of less that duration of 70 years, they tend to apply for an extension and have the lease extended before they market the property. After weighing your options and you decide to extend your lease, here are a few things you need to keep in mind. One of the good things about extending a lease in the UK is that if you have owned or have been staying in the property (flat, mansion, apartment, etc.) for at least 2 years, you will be allowed to have your lease extended to an additional of 90 years, and still have the same or even zero ground rent. Be sure to act before your lease ends, as some options may be forfeited for you by then. |
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