Safe Home Offices

To create a home office that’s suitable for more than one person to use you need to consider office design, begin by working to create an efficiently designed work space. Move furniture pieces up against the walls to open the center of the room, creating the illusion of more space. This also facilitates positioning computer monitors and office equipment so that they back up against the wall.

Purchase a chair specifically designed for office use, and one that’s right for your body size. Office-supply centers and furniture stores both offer assortments of office chairs. Try out a number of them before you make a final purchase. Look for a chair that allows your feet to touch the floor easily, and offers good back support. Also, it’s important for an office chair to have low tension in the back so that you can recline back slightly. This is particularly important for those working at their desk on a personal computer. Get a chair with adjustable height and adjustable arm rests to allow you to adjust to a comfortable posture and help relieve strain.

Don’t forget to purchase a plastic floor-mat that will allow the chair casters to roll, and to protect the floor or before you know it you will be working on office refurbishment.

Managing clutter is critical for an efficient office, particularly if more than one person will be using the office. Designate specific storage areas for each individual working in the office, and storage areas for specific office supplies and materials. Consider purchasing organizing bins for holding files, videotapes, CD-R’s, a telephone book, etc.

On the desk surface, standing file organizers help keep papers and files neat and out of the way. Stackable paper trays are also helpful for organizing papers and freeing up work space on the desk surface.

There are several effective methods for organizing electrical cords. A cord-snake or cord-guard can help consolidate cords. Ordinary twist ties or plastic ties can also be used to group cords and tie them together so they are less obtrusive.

With the increased use of computers for home-office work, overhead lighting is less critical. A good task light is important, however, for providing well-placed illumination on the work surface. Use a frosted bulb to reduce glare that can cause eye fatigue.

If glare on your computer monitor is a problem, consider purchasing a glare guard that will fit on your computer monitor.

Extending a lease

1. What Is A Property Lease?

A lease simply means the right to occupy a property (usually a flat) for a period, which is generally set at 99 or 125 years. At the end of this time, although you can stay on as a tenant, the freeholder (freehold enfranchisement) will own your property.

2. Can I Extend My Lease?

The good news is that, as long as you have owned (but not necessarily lived in) your property for at least two years, you have a right to a lease extension for an additional 90 years at a peppercorn (zero) ground rent.

But there are exceptions. You can’t force the freeholder to extend a lease if:

- The majority of the leaseholders have applied to obtain the freehold

- Your lease has already ended

- You have sublet your home on a lease of at least 21 years

- The lease was originally granted for less than 21 years

- The freeholder is a charitable housing trust, the National Trust, the Crown (although they may agree), or the property is in a cathedral precinct

- If your freeholder wants to demolish or redevelop the property (in which case you would be entitled to compensation)

Should your freeholder refuse to extend your lease for any other reason than those listed above, get advice – they may be wrong (more on advice below).

3. Why Extend? Value

The most immediate reason for extending is that a short lease can seriously affect the value of your property.

A a flat with a lease of 100 years is worth roughly the same as a property on a freehold. But an apartment on a lease of 60 years, could be valued at approximately 60 per cent of the freehold price.

In practice, however, property values are more likely to be worked out at the freehold price, minus the estimated cost of extending the lease.

But bear in mind that if you wait until you have less than 80 years to go, buying lease extensions becomes more expensive (under 80 years and you have to pay so-called Marriage Value – more on this below).

4. Why Extend a Lease? Saleability

The second reason for extending a lease is saleability. Wealthy home hunters looking for a London pied-à-terre are more likely to accept a shorter lease, and can usually access specialist mortgage lenders who are happy to lend on short leases. But they are in the minority.

If you’re selling a flat in Fife or an apartment in Acton, most buyers will be scared off by a short lease, and they may also find that they can’t get a mortgage from the high street lenders.

A quick phone around reveals that the Woolwich doesn’t lend on property with a lease less than 30 years longer than the term of the mortgage (making it 55 years on an average 25-year mortgage).

The Halifax asks for 35 years longer (so, 60 years), and the Bristol and West draws the line at 70-year leases.

So, particularly if your lease is less than 70 years, it may make sense to apply for an extension before marketing your property.

5. Saleability and Assignment

Buying an extension is a costly business, and it can also take anything between two and six months – not good news if you’re low on funds and in a hurry to sell your flat.

There is another way, known as assignment. The seller begins the legal process to extend the lease, but assigns the right to the incoming leaseholder, who can complete it when they take ownership.

So, instead of having to wait two years to extend a lease, the purchaser can buy an extension straight away, which should leave both buyer and mortgage company happy.

6. How To Extend

There are at least two professionals whose services you’re likely to need when extending a lease.

Firstly, a valuer, usually a surveyor. A surveyor will be able to provide you with best and worst case estimates on the value of an extension, advise you on the amount of money you should offer the freeholder, and help you to negotiate an agreement. If you can’t agree a figure, the valuer will represent you at a Leasehold Valuation Tribunal (LVT).

Secondly, you will need a legal representative – either a solicitor or a licensed conveyancer. The solicitor or conveyancer will prepare the information you need for the application, serve the notice on the landlord, answer requests for information, and conveyance the new lease. There are also various specialist companies who will do the whole lot for you.

7. How Much Will It Cost?

How much the extension is worth is difficult to estimate accurately.

The value consists of three main amounts. The first two are to compensate the landlord for loss of ground rent during the rest of the existing term of the lease, and for not receiving possession of the property at the end of the term.

Thirdly, where the lease has less than 80 years to go, there is what’s known as a ‘marriage value’, which is arrived at by deducting the value of the property before the extension from the value afterwards, plus the value of the landlord’s interest.

Leasehold Advisory Service, the information service for leaseholders, gives an example of a flat with a 68-year unexpired lease, on a ground rent of £50 pa, with a current value of £150k, and an improved value of £165k. An extension of 90 years is likely to cost £8,250.

But the same property, on a lease with only 35 years to run, could set you back a whopping £55,368.

However, if the current lease is 95 years (and therefore attracts no ‘marriage value’) the cost of an extension would be only around £734.

In addition, the leaseholder is liable for both parties’ legal and valuation costs, unless the matter ends up at the LVT, who may apportion the costs differently.

Although it may be an expensive business, remember that you are adding value to your property, and, in addition, you will no longer have to pay ground rent.

8. Valuation Problems

Stories abound of leaseholders who have successfully negotiated the cost of a lease extension down, in some cases to half of the original figure.  It can be useful to engage a Lease Extension Specialists when negotiating with landlords to minimse the cost.

But if you can’t agree on a price, you can turn to the LVT – The Leasehold Valuation Tribunal. They will come up with a figure based on what they consider reasonable, including making a costs order if either party is acting unreasonably.

9. Bought A Flat With A Short Lease?

As a new leaseholder you don’t have an automatic right to an extension but, if your freeholder is amenable, you can try and negotiate one before the end of the initial two-year period.

If you face problems agreeing a figure, however, you won’t be able to turn to the LVT for help.

10. Use It, Don’t Lose It!

Remember – if you wait until your lease ends your freeholder will be under no obligation to negotiate an extension, and you could become an assured tenant, rather than the owner of your home.
Nikki Sheehan

© Find A Property 2000-2007

freehold enfranchisement

A lease is a wasting asset. Although a flat owner may have spent hundreds of thousands of pounds acquiring their lease, in fact it becomes less valuable each year. This is because the term of the lease expires by one year annually. To remedy this inherent unfairness, individual flat owners have the right to ask the building owner to extend their lease. In addition, a group of flat owners acting together can collectively ask to purchase the freehold from the building owner. Owners of residential flats can now force their freeholder to sell the freehold provided at least 50% of the tenants participate. This is known as freehold enfranchisement or collective enfranchisement.

After enfranchising, each participating flat owner owns a share in the freehold and will usually receive a lease extension at no extra cost. Purchasing the freehold or extending a lease will come at a cost, but also serves to protect the value of the property.

In order to participate in a freehold enfranchisement the tenancies must originally have been over 21 years in length and at least two thirds of the flats must be qualifying tenancies. Less than 25% of the building can be commercial space. The building must be self contained and structurally detached.

A freehold enfranchisement can be made unsuccessful or more difficult by such factors as a resident landlord or where three or more flats are held by one individual.

Freehold enfranchisement is a complex matter and requires careful planning and expert advice so if you would like to take advantage of a free initial consultation please call Charles Tellerman MRICS on +44 207 792 9950.