Why Shoes to Extend?
Leeds has a new shopping centre. On the day the centre opened I paid a visit and within minutes found myself clutching a bag containing a pair of luxury, albeit very expensive, pair of shoes.
“These are an investment,” I told myself as I handed the shop assistant a wad of cash. How wrong I was. After wearing the shoes twice they looked tired and a far cry from their former glory. In fact, if I now sold them on ebay, they wouldn’t recoup the train fair I spent when I originally ventured into Leeds!
They had been a bad investment.
Luxury footwear aside, there are many things to invest in which will retain or appreciate in value such as a fine work of art or bricks and mortar. Indeed, for many, their most valuable asset is their home … or is it?
If you are a leasehold owner then the value of your home could be reducing with every passing day.
If your lease has a term of 80 years or less, and you decide to sell the property, the majority of potential buyers will struggle to obtain finance to fund the purchase.
This is because, in the eyes of most banks, a lease of eighty years or less is a short lease. This may affect the saleability of your home so that you struggle to sell the property at a profit.
All is not lost!
If you own a long lease then under legislation you have a right to extend that lease by an additional 90 years, on broadly the same terms as your existing lease, with the reduction of your ground rent to zero, upon payment of a premium.
The extension of the lease protects the investment you have made in your home and, when you come to sell, will make it a much more attractive option to a prospective buyer.
So why not check your lease and make sure that instead of holding an expensive, depreciating asset, like my pair of shoes, you hold an investment which will only increase in value.
This article was written by Commercial Property solicitor Harriet Thornton.
Harriet specialises in leasehold enfranchisement.