If you are looking to purchase or sell a leasehold property then you are going to quickly want to find out how long is left on the lease.
Why is it so important to know how long is left on a lease? When your lease has less than 80 years left on the lease this can affect the value and saleability of the property. Before it gets to this length of term, you want to look at undertaking a formal less extension of the leasehold which will add an additional 90 years to the lease, reducing the ground rent to a peppercorn (£0).
There are a few different ways that you can find out how long is left on a leasehold property.
Review Your Lease
Getting your hands on your actual lease is the best way to find out how long is left on your lease if you currently own a leasehold property, along with other information relating to review periods, duration and so much more.
When you purchased the leasehold property you would have been given a copy of your lease in your package of documents. The lease is something you will want to refer to during various stages of owning the property, so it’s best to keep it secure in a safe place.
The lease clearly states when the lease was entered into, and the length (in years) of the lease. This can usually be found in the opening terms of a lease under ‘Prescribed Clauses’.
Ask Your Freeholder For A Copy of The Lease
If you cannot locate your own lease then you can contact your freeholder and request a copy. However, this will usually come at a cost. This can vary between £0-£100. Freeholders are not regulated, and what they charge does vary from freeholder to freeholder.
There are cheaper ways to obtain a lease to review how long is left on a leasehold though.
Ask Your Solicitor
Whether you are purchasing, or selling, asking your solicitor for a copy of the lease is free and they should be able to help you with this. An estate agent is not usually best placed at getting this information for you, so always do follow up with a solicitor.
If you are purchasing a leasehold, a leasehold sale will not go through without a physical lease that can be reviewed by all parties anyway. Often solicitors will provide their own enquiries and advice if there are any issues with the remaining terms of the lease. Such as, whether there is an insufficient amount of time remaining on the lease.
Search Online & Pay A Fee
Another option is to download your title register and office copy of entry of the leasehold title from the Land Registry. You need to initially pay £3 to download a copy of the title register, it is then only a further £7 for the deeds request.
The title register should be enough, and it will show you the date that the lease started and the length of it in years so you can work out how long is left on your current lease, from today’s date.
Finding out how long is left on the lease is SO important when purchasing a leasehold property, I would personally never touch a property with less than 90 years on the lease, as you loom nearer that 80 year mark.
When Should I Extend My Lease?
You should extend it before it reaches 80 years. When it gets to less than 80 years left on the lease, the more expensive it becomes to extend it. As the lease length goes down, the cost of extending the lease goes up. Below 80 years it attracts marriage value, this means if you extend, the freeholder is entitled to 50% of value which the extension adds to the property.
Always look for something with 90 + years left on the lease term as a formal lease extension can cost thousands of pounds, and you need to have owned the property for two years to be able to do so.
Formal or Informal Lease Extension?
In the case of lease extensions, the formal route is the best option as this will give you zero ground rent and add 90 years to the lease, and nothing else will change in the lease. Whereas informal extensions often look and sound better because they are less expensive, but ground rent will increase over the term of lease, and other parts of the lease may change too.
The added problem for those who have completed informal lease extensions have found, or those who have bought flats where informal deals were done by previous owners, is that it makes selling these properties in the future more difficult if the ground increases. In addition, the lease terms are not as desirable as conveyancing solicitors are becoming better versed with the issues surrounding leasehold properties.
Finding out the length of time left on the lease can save you a huge nightmare, as a purchaser, or seller. If you have any further questions surrounding this topic please drop me a message or join the conversation over in the National Leasehold Campaign Facebook group.