Welcome to Extend Now!
Thinking of extending your lease or buying the freehold in North London? At Extend Now, part of Gilmartin Ley Chartered Surveyors, we provide the expert valuation advice you need. Our service does not stop with the completion of the valuation report - we have a good track record for negotiating fair settlements for our customers, and offer an excellent "after sales service".
Did you know..... the law enables you to extend your lease by 90 years e.g. if there are presently 76 years remaining, you can obtain an extension to 166 years. This applies whether or not the landlord agrees. The law does not prohibit you from agreeing other sorts of lease extensions "outside the Act" with your landlord - it is just that the only sort of lease extension the law forces your landlord to grant is the 90 year one.
Alternatively, providing you form a group with a sufficient number of the other leaseholders in the building, the law grants you the right to buy the freehold (also known as "collective enfranchisement").
While asking your freeholder / landlord to quote you a price for extending your lease is often a good starting point, don't make the mistake of assuming this is reasonable - get some valuation advice!
Is now a good time to extend my lease or buy the freehold?
While it has been tested many times, and occasionally tribunals have accepted different rates, the rates established in Sportelli for valuing the freeholder's reversion (that is the freeholder's interest at the expiry of the lease) prevail. These are known as 'deferment rates' and, Sportelli established this at 5.00% for flats. While all the properties in the Sportelli case were in Prime Central London (PCL), it was effectively stated that there was no reason for the rate not to apply nationwide. This is the current position and it may change in the future.
Assuming that the rates established in Sportelli continue to apply, the two most significant factors which influence the price payable for a lease extension or a freehold purchase are: (1) the unexpired term of the lease / leases and (2) house prices.
The shorter the unexpired term of the lease, the more the lease extension / freehold purchase will cost because the freeholder's 'reversion' comes sooner and this makes it more valuable.
Higher house prices also make lease extensions / freehold purchases cost more.
House prices in Greater London are forecast to increase at a steadily increasing rate over the next five years, as follows:
Greater London House Price Forecast 2017 - 2021
|Greater London % pa||1.0||2.0||3.0||5.0||7.0|
Source: JLL, November 2016
Taking into account the 1% expected growth for this year, this growth equates to 19.2% in 5 years. This sort of price growth, other things being equal, would make your lease extension or collective enfranchisement considerably more expensive. Even if your lease is not nearing the 80 year mark, and provided you have the funds available, NOW is therefore an excellent time to extend your lease or buy the freehold. Call us to see how we can help get you agree a fair deal and make the process as smooth as possible.