Debt management could help leaseholders

19/01/2010

Debt management could help flat owners with leasehold properties meet the expenses required to renew their leases.

Flat owners, who bought their properties in the 1970s and 1980s on relatively short leases of 125 years, have been warned of the expenses that will come with the "80 year time bomb".

Genevieve Mariner, Lease advisory board director, said: "Many flat owners put off the expense of lease extension, but they should be aware of the 80 year time bomb."

It is still possible to extend the lease by 90 years, but the cost of doing so will increase dramatically after the unexpired term of the lease drops below 80 years.

The increase in cost is due to the fact that once the unexpired term has fallen below 80 years, a marriage value, which takes into account any potential increase in the property's value, must be considered alongside the property's current worth.

Leaseholders are recommended to check the cost of extending the lease as soon as possible in order to avoid added costs by delaying adding additional time.

Tags; Housing Debt and Bills,

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