Lease extension or renewal involves a financial commitment encompassing various potential expenses. These may include legal fees for solicitors specializing in leasehold property, valuation fees to assess the property’s current market worth, and a premium payable to the freeholder for extending the lease. For example, a leaseholder might incur solicitor fees, valuation costs, and a substantial premium paid to the freeholder to extend a lease with only a few years remaining.
Understanding these financial implications is crucial for leaseholders. A longer lease term can significantly enhance the property’s market value and saleability, offering greater financial security and peace of mind. Historically, shorter lease terms were more common, but increasing awareness of the implications has led to greater emphasis on lease extensions and renewals. Securing a longer lease provides stability for the leaseholder and protects their investment.
