What is a Lease Extension?
A leasehold is the right to occupy a property for a period of time. The freeholder has a superior interest in this property for a longer period of time and at the end of the lease term the property reverts to the freeholder. Most flats are sold as leasehold properties. A lease extension is when you add years to the terms of the lease on your property.
“Can I Extend My Lease?”
You can extend your lease by the statutory route if:
- You have owned your property for at least two years
- You are the owner of a long lease (one originally granted for 21 years or more)
If you are not eligible, you may want to look into a voluntary lease extension instead.
Why Extend the Lease?
- Make money: a lease extension will increase the market value of your property and make it more appealing to prospective buyers/lenders. If you renew the lease before it runs below 80 years, you will avoid incurring ‘marriage value’ (which significantly increases the cost of extending the lease).
- Save time: extending the lease is easier and less time-consuming than leasehold enfranchisement, which is a complex, collective process contingent upon the coordination of at least half the flat owners in the block
- Improve the terms of your lease: add an extra 90 years to your lease and never pay ground rent again (pay only a nominal ‘peppercorn’ ground rent)
How Much does it Cost?
- Your solicitor’s fees – click here for a free quote
- Your surveyor’s fees – call us on 020 8371 7161 for a referral
- Disbursements – standard Land Registry fees and other expenses
- The premium you pay to the landlord – this depends on the length of the lease, the value of your property and the ground rent payable. Your surveyor and the landlord’s surveyor will each arrive at a figure before commencing negotiations to decide the final amount, which will be determined by the tribunal if no agreement is reached. Click here for a free estimate
- Your landlord’s legal and surveyor costs – these should be similar to your own, but if they are too high you can challenge them at the tribunal.
How Long will it Take?
The time it takes to complete a lease extension varies considerably based on many factors, such as how cooperative your landlord is and whether the case has to be taken to the tribunal. On average, however, it takes around 6-9 months, possibly up to 12 months.
For further information please consult our online guidance section.