Lease Extensions - Expert advice on extending your lease

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Lease Extensions

A lease extension is the process of paying the landlord (or freeholder), a sum of money, sometimes referred to as 'compensation' to extend the lease remaining on a property.

If you are the leaseholder of a property, you are effectively renting it for a certain period of time. If the lease remaining drops below 80 years, the value of the property will decrease and the price to extend it will begin to climb, sharply. In addition to this, shorter leases may also impact the sale of your property as it will be less attractive to potential buyers and mortgage lenders.

When should you extend your lease?

If your lease has around 90 years remaining, you really need to start looking at an extension. If this figure drops below 80 years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property.

It may be more difficult to sell a property with a short lease, as mortgage lenders may be reluctant to lend.

How to extend your lease

The first stage in the process is for you instruct a surveyor to carry out a valuation under The Leasehold Reform Housing and Urban Development Act 1993 (as amended).

Loosely speaking, the cost of extending, also known as the premium, is calculated based on what the landlord stands to ‘lose’ by granting the lease extension. Your surveyor will calculate your “opening offer premium” in order for your solicitor to serve a Section 42 Notice on the landlord which starts the formal proceedings.

There are rules and time-scales that need to be followed which is why it is imperative that you seek advice from a suitably qualified solicitor and surveyor.

Are you eligible for a lease extension?

The main qualifying criteria is that you must have owned the property for more than 2 years, and you must have a ‘long lease’ i.e. one originally granted for 21 years or more.

You should note that you are responsible for reasonable costs incurred by the freeholder during this process. These costs are likely to include valuation fees and legal fees in addition to your own valuation and legal fees.

The extension process can either be undertaken formally or informally based on your circumstances.

How Romans Surveyors can help

Romans' team of RICS surveyors know only too well the price you can end up paying if you don't extend your property's lease early enough. Extending your lease in time could, in fact, save you thousands of pounds in the long run.

With over 25 years of experience, our RICS qualified surveyors are experts in their field and will:

  • Provide you with clear, impartial advice

  • Help you through the entire process of extending your lease

  • Act in your interest to enable the right decision for your circumstances

How much will a lease extension cost?

The price of extending a lease on a property depends on several variables, including the property's value, the length remaining on the lease and also the negotiations that you have with the freeholder.

Please get in touch to discuss any potential costs or to get expert advice on extending your lease.

Please call 0333 222 3526 to discuss your lease extension

Get advice from industry experts
Duncan Matthews

Duncan Matthews, BSc, MRICS, Surveyor

Duncan is a Chartered Surveyor working from our Guildford office.

He undertakes a range of valuations and surveys on residential property, specialising in lease extensions and collective enfranchisement.

Choose a surveyor you can trust. Get your free online quote today.