Many properties built in the 1960’s and 1970’s were sold with a Leasehold tenure, often on the basis of a ninety-nine year Lease. Many of these will therefore have only around fifty years remaining.
Few mortgage providers will consider lending against properties with less than seventy five years to run on the Lease, meaning the value of such properties can be significantly reduced. Many people are unaware of this problem until they try to sell or remortgage their property.
Once the term of the Lease has expired, in theory, the property reverts to the Freeholder – often a faceless investment company. The Leaseholder can pay a premium to the Freeholder to either extend the term of the Lease (usually the case in respect of flats) or to purchase the Freehold. The premium that is paid, however, will increase as the term of the Lease decreases.
For further information or advice, please contact Kevin Smith on 0191 232 8345 or email Kevin.Smith@hay-kilner.co.uk
This article is not legal advice; it is intended to provide information of general interest about current legal issues. Please contact us to discuss how the contents of the article may affect you.