Best time to extend your lease or buy freehold?

As a result of the poor state of the property market, I would suggest NOW is the best time to either extend your lease or collectively buy your freehold. Let me explain...

You can extend your lease one of two ways..1. By agreement with your freeholder or 2. By serving a formal notice on your freeholder (assuming you have owned your flat for 2+ years). With number 1, the timescales on average would be about 2-3 months, whereas number 2 would take about 6-9 months.

The above also applies to buying the freehold, save that the 2-year ownership rule does not apply to freehold purchases.

When you come to sell your flat, if you have anything less than 85 years remaining, you run the risk your buyer will insist you extend the lease before they will buy your flat. The less term you have remaining, the more you run this risk of this happening.

So, in a market downturn, when a lot of flat owners decide to delay selling, it is the perfect time to take action now to either extend your lease or buy your freehold.

What you don't want to happen is to find yourself in a situation whereby you are forced to accept an inflated price set by your freeholder, whilst you are desperate to see your sale through. Your freeholder will know you are selling, and is likely to hold you to ransom. Deal with it now, and cut out this extra hassle and cost when you come to sell.