Should I wait to extend my lease? Lucy Barber writes for The Sunday Times
I own a two-bedroom flat in London, and hope to sell it in a few years’ time and move up the ladder. There are 70 years left on the lease, so it’s time to extend it, but I’ve heard the government is reforming leasehold law and is now in a consultation phase. Should I extend the lease now, when the price I pay for the extension might soon be lower?
Lucy Barber, Head of Residential Property, answers a reader's question in The Sunday Times' 'Question of the week'. The article, entitled 'Leasehold reform is coming soon. Should I wait to extend my lease?' sits behind a paywall and requires a subscription to read.
Lucy comments that: "The government is looking at how to reduce the premium payable for a lease extension, making it more cost-effective for tenants while ensuring landlords receive sufficient compensation. It is not yet clear what changes will occur or when, or how they will affect the cost of lease extensions. It could take years to pass any reforms, by which time you may want to sell your flat." Lucy goes on to discuss the options for valuing the property and consulting with a specialist valuer to establish how much a lease extension would likely cost to establish whether there would be any financial benefit to extending the lease now, or whether a sale might best be delayed until law reforms come in and potentially make extension of the lease cheaper.