When you decide to sell your flat, any lease approaching 80 years or below will create difficulties on sale as a purchaser’s solicitors will regularly advise of the potential cost and difficulty of saleability to their client.
This usually creates a delay while enquiries are made to your solicitor and then to the Freeholder who in this case will advise that they will only entertain a lease extension by a statutory route (ie. you have to serve a Notice-and this can take up to 9 months to conclude).
These difficulties may result in your purchaser requesting a reduction in price, or more likely withdrawing from the purchase.
Even if you were to offer a reduction in price, the buyer has no guarantee that he/she could acquire a lease extension from the Freeholder subsequently, as a flat owner will have to have owned the flat for a minimum of two years before qualifying for a lease extension.
The cost of the lease extension will certainly increase the shorter the lease becomes.
This can also apply when you want to re-mortgage your flat. Increasingly, lenders are insisting on a lease extension when the term has fallen below 85 years.
Therefore, obtaining a lease extension (if your lease is around 80 years, or less) will protect the value of your flat and improve saleability.