What is a leasehold extension?

A leasehold extension is the process of extending the lease term of a property held on a leasehold basis. It helps maintain the property's value and desirability. Leasehold extension legislation allows leaseholders to extend their lease, ensuring the property remains attractive for sale or mortgage purposes.

How long is a leasehold extension ?

The length of a leasehold extension can vary depending on the jurisdiction and specific circumstances. In some countries, such as the United Kingdom, leasehold extensions are typically granted for an additional 90 years beyond the remaining term of the existing lease. However, it's important to note that leasehold extension regulations can differ, and it's advisable to consult local laws or seek professional advice like leasehold valuations for accurate information regarding leasehold extensions in a specific jurisdiction.

What are the benefits of lease extension ?

Extending the leasehold of a property offers benefits such as increased property value, improved marketability, easier access to mortgage financing, peace of mind and security, the avoidance of escalating costs, and more control over property management.

What happens to leasehold property after 99 years ?

After 99 years, the leasehold property typically reverts back to the freeholder, unless the lease is extended by the leaseholder. The ownership of the property, along with the land it is built on, returns to the freeholder once the lease expires. As a lease approaches its expiration, the property’s value may decrease, making it more challenging to sell or mortgage. It is advisable for leaseholders to consider extending their lease well before it reaches the 99-year mark to maintain the property’s value and their ownership rights.

Why choose leasehold Valuations for Lease extension or Buying Freehold ?

1. Fair Price: A leasehold valuation ensures you pay a fair price for a lease extension or freehold purchase.2. Increased Property Value: Extending the lease or buying the freehold can potentially increase your property’s value.3. Cost Savings: Accurate valuation helps minimise future costs like ground rent.4. Stronger Negotiation: A valuation report strengthens your position during negotiations with landlords.5. Legal Compliance: Valuations ensure you meet legal requirements for lease extensions or freehold purchases.6. Future Planning: Valuations help you plan for selling or passing on the property to future generations.7. Expert Advice: Engaging a valuer provides access to their expertise and guidance.8. Mortgage Support: Valuation reports improve your mortgage opportunities for lease extensions or freehold purchases.

How much does it cost to renew a leasehold ?

The cost of renewing a leasehold in the UK can vary depending on various factors, such as the property value, the length of the renewal term, and any negotiations between the leaseholder and the freeholder. Unlike extending a lease, which typically involves paying a premium to the freeholder, renewing a lease generally involves paying a nominal fee known as a “peppercorn rent” or a small percentage of the property value.The exact cost of renewing a leasehold will depend on the specific terms agreed upon between the parties involved. It is advisable to consult with a solicitor or a licenced conveyancer who specialises in leasehold matters to get an accurate estimate of the costs involved based on your particular situation.

Q. How much does it cost to extend a leasehold in uk ?

The cost of extending a leasehold in the UK can range from a few thousand pounds to tens of thousands of pounds, depending on factors such as the remaining lease length, property value, and negotiated terms with the freeholder. Additional costs include legal fees, valuation fees, and disbursements such as Land Registry fees. It’s recommended to seek professional advice for an accurate estimate based on your specific situation.

How to extend the lease of a flat?

July 23, 2020

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Anyone who owns a leasehold property should bear in mind that the lease should be extended before the length of the lease starts shrinking too low. The length of the lease and the cost to be incurred in extending the lease, are inversely interconnected and so as the lease term reduces the cost to extend it increases. We are going to explain certain steps to be followed to extend the lease of a flat.

How do I get a new lease granted for my flat?

As each year passes on your lease, the value of your flat/property diminishes. Therefore, it is recommended to extend the lease as soon as possible because once the lease length falls below 80 years, you need to pay an additional amount for its extension. Mortgaging or remortgaging also becomes difficult when less than 75 years are left on a lease and it may become the reason for your inability to sell the flat. All such factors also decrease the value of the flat.

How can I extend the lease of my flat?

The residential lease extension process is rather complicated and thus, it is recommended to consult an expert who could guide you in the right direction and bring in the best possible results. Otherwise, a small glitch can become very costly in terms of money as well as time.

Apart from consulting an expert, the next thing you should do is serve a Section 42 notice to the landlord and any other intermediate landlord, including your offer for the premium. In return, the landlord will respond with Section 45 notice that includes the counter offer. Eventually, both parties agree on a price to extend the lease. If either of the parties does not agree on the terms and conditions, they can apply to the First-tier Tribunal to decide on the premium amount.

Secure the future of your property with Leasehold Valuations.

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Can the landlord refuse to grant the extension?

Provided that the leaseholder and the property qualify and a valid notice has been served under the Leasehold Reform Act 1967 or the Leasehold Reform, Housing and Urban Development Act 1993, then the freeholder is obliged to extend the lease.

The landlord must serve his response within a couple of months from the date the section 42 notice was served by the leaseholder, or else the leaseholder is able to apply to the First tier Tribunal to extend the lease for the price stated in the notice.

Qualification for a lease extension

Before executing the procedure and all other formalities, one must qualify for the lease extension. Here are some of those requirements for the qualification:

Own an existing long lease which was originally issued for a term of at least 21 years
Owned a flat for a minimum of two years

How long can I extend the lease of my flat?

The lease can be extended by 90 years made under the Leasehold Reform, Housing and Urban Development Act 1993. Alternatively, the leaseholder and freeholder can mutually agree without the need to serve any legal notices. However, under this scenario the freeholder has a stronger bargaining power.

What is the best time to extend the lease?

The lease should be extended ideally with more than 80 years remaining. That means the length of the lease should be a minimum of 80 years.Otherwise, the cost of the lease extension increases rapidly.

How much I have to pay to extend the lease?

The cost to extend the lease depends on multiple internal as well as external factors, including the property size, type, the number of years left on the lease, freehold value of the property, and the annual ground rent; therefore, it is very hard to define a particular amount.

Calculating the cost for the lease extension is considered a complex process, and it is therefore recommended to go for professional valuation services by an expert who complies with the requirements of the Leasehold Reform Legislation.