Extending your lease

Expert advice for:

Extending Your Lease £££££

Property Value

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70 Year Lease

160 Year Lease

Why Extend My Lease?

As a lease gets shorter, the property becomes less valuable.

It also becomes less appealing to purchasers and mortgage companies. The law allows homeowners to extend their leases, however the price payable to the freeholder will vary according to the value of the home, the number of years left on the current lease and many other variables. Homeowners can extend their lease at anytime and do not have to wait until they sell.

What am I entitled to?

The Leasehold Reform, Housing and Urban Development Act 1993 was brought in to assist flat or apartment owners. It gives people the right to: 1. Extend the lease on a typical flat or apartment by 90 years (in addition to the unexpired term). At the same time, the ground rent you pay can be reduced to nil.

2. Collectively buy the freehold (if all other leaseholders in the same block of flats agree).

When is the best time to extend a lease?

If you have owned your leasehold property for at least two years, then you have a legal right to extend your lease. However, you must decide how and when to do this, because the process is initiated by you (the Leaseholder) and not the Freeholder.

Leaseholders can trigger the process at anytime, but this is especially important when the number of years left on the lease starts to fall below 85 years. The cost to extend the lease is generally always increasing but the costs increase significantly when the unexpired term drops below 80 years.

What will it cost to extend my lease?

It’s very difficult to give an exact price, because the cost of extending a lease will depend on the terms of your lease, the value of your property, any major improvements you have undertaken, the number of years left remaining on the lease and the latest case law.

However, for a guide, here are some examples of leases we have extended:

A studio in Bognor Regis The owner paid the freeholder £1850 to extend the lease from 82 to 172 years.

The studio increased in value by £7,000 to £110,000.

A 1 bed flat in Chichester The owner paid the freeholder £15,250 to extend the lease from 74 to 164 years.

The flat increased in value by £25,000 to £255,000.

A 2 bedroom garden flat in central London The owner paid the freeholder £45,000 to extend the lease from 65 to 155 years.

The flat increased in value by £95,000 to £575,000.

I’m selling my flat. Do I have time to extend the lease?

There are two ways to extend your lease. Either, with formal notices, or negotiating amicably with the Freeholder. It is possible to negotiate lease extensions quickly, with the price paid from your sale proceeds at the time of completion. However, every case is unique and we can advise you on the options available to you. If you can act much sooner, then this is always preferable and often cheaper.

I want Henry Adams to extend my lease.

What next?

In the first instance, we would obtain a copy of your lease from the Land Registry so we can assess how this will impact on the premium you pay to the Freeholder. We might need to visit your property to accurately assess it’s value. We can ignore any major improvements (not paid by the Freeholder) as this helps to reduce the cost of the lease extension. We will advise you on the approximate cost of extending the lease, the options available to you and what steps to take next. The process will eventually require a solicitor for completing the lease extension documents and serving any formal notices.

Get in touch Guy Peters MSc MRICS Chartered Surveyor and Valuer guy.peters@henryadams.co.uk 01243 521 811

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