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It doesn’t matter what the property market does, there are always opportunities. And the current market conditions provide such an opportunity for the owners of leasehold flats, suggests Richard Meeson, a partner at Dreweatt Neate.

“Selling a flat is not easy at the moment and any with 70 years or less remaining on the lease are going to become increasingly difficult as most buyers would not be able to obtain a mortgage,” he explains.

“It makes sense if your lease is short to extend it as soon as possible. It may seem strange, but a short lease drives down the sale value of the property while it drives up the cost of buying out the freeholder.

“It’s easily explained because the shorter the lease, the sooner the property reverts to the freeholder – in other words it is closer to becoming his again so his value in it has increased.

“Ideally, once you have owned your flat for two years you should look to extend the lease as soon as possible. The longer the lease, the lower the value of the freeholder’s interest in it. That’s why it’s important not to leave an approach to the freeholder for too long.

“The Leasehold Reform, Housing and Urban Development Act 1993 (as amended) gives qualifying leaseholders the right to extend their lease for a further 90 years and any ground rent payable will be reduced to zero.

“A premium is paid to the freeholder that reflects the compensation for loss of ground rent and the right to obtain possession of the property. It’s calculated using a specific formula, part of which is assessing the market value of the flat now and after the lease is extended.

“That’s where the current property market helps, because with values decreased it’s a good time to consider a lease extension.

“Before you even approach the freeholder, have a professional valuation report from a local chartered surveyor, a member of the RICS, to use as the basis for negotiations. You are then armed with the ideal tool for taking a lead in the process and settling on a fair price. Any office of Dreweatt Neate will be able to put you in touch with a suitable surveyor. Just give us a call.”