If you own or are considering purchasing a flat as a second home, it may well be a leasehold property. If it is, the inherent value of the flat is linked to the length of its lease. This is an area which many fail to appreciate until they come to sell, often finding out the hard way that they should have tackled the issue proactively.
In this situation, there is often little room for manoeuvre and the terms available for a lease extension with the freeholder are often inferior to their legal entitlement, as well as costlier.
As we are aware in other aspects of life, time passes all too swiftly, and, as the years pass, the length of our lease reduces accordingly. A lease will likely start out comfortably above the 'danger zone' (typically 85 years or less outside central London), but before you know it, it is in dire need of attention.
We advise flat owners to keep an eye on exactly how long their lease is, so as not to be caught out. It is key to take action before it becomes a problem by being aware of the exact date when the lease is going to slip below the crucial 80-year level because when it does, the value of your property will plummet. After this time, the freeholder could be entitled to receive thousands of pounds more to extend the lease in the form of 'marriage value'.
Flat owners should always seek the advice of a trained expert. Membership of ALEP acts as a badge of assurance so that flat owners and freeholders can be confident that they are employing professionals with the right level of experience in handling potentially complex transactions.