Here are some benefits of extending your lease:
- You can extend your lease for an additional 90 years on top of your unexpired term, meaning that your flat is easier to sell and get a mortgage;
- Your ground rent is reduced to nil (referred to as a peppercorn rent) from completion of the lease extension;
- A lease is a wasting asset, which means that the shorter the term becomes, the less it is worth, so a longer term inevitably increases the value of the flat;
- Extending your lease will increase the value of your property if you wish to sell, a longer term is more appealing to potential buyers;
- Lenders are becoming more conservative on lending against flats which have short leases. Most lenders will refuse to lend where a lease drops below 55 – 60 years. This means that you may have difficulty re-mortgaging yourself. And equally, if you come to sell the flat, then any prospective buyer may be unable to obtain a mortgage over the flat. That means that your flat may become unsaleable.
