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.

Illustration of a lease extension process with a focus on individual rights

Can I Extend My Lease If Other Freeholders Aren’t Interested in Extending Share of Freehold?

October 10, 2024

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If you own a share of the freehold but find that your fellow flat owners are uninterested in extending their leases, you might be wondering about your options. The good news is that you can still proceed with extending your lease individually. In this blog, we’ll explore the process, requirements, and considerations involved.

Understanding Lease Extensions

A lease extension allows you to renew the terms of your lease for a longer period, typically 90 years for flats and 50 years for houses, which can significantly increase your property’s value. However, the process can be more complex when you’re part of a share of freehold arrangement.

Individual Rights in a Share of Freehold

Your Rights: As a leaseholder with a share of the freehold, you have the legal right to apply for a lease extension individually, regardless of other owners’ decisions. This is a significant advantage of holding a share of the freehold, as it grants you autonomy in managing your lease.
Section 42 Notice: To initiate the lease extension process, you’ll need to serve a Section 42 Notice to your fellow freeholders. This document formally requests an extension and outlines your proposed terms. If you’re unsure about how to draft this notice, consider referring to our guide on issuing a Section 42 Notice.
Costs and Valuation: You may need to pay a premium for the lease extension, calculated based on various factors, including the remaining lease term and the property’s value. For a detailed overview of how to calculate this premium, see our article on lease extension valuation.

Process of Extending Your Lease

The lease extension process typically involves the following steps:

Valuation: Hire a qualified surveyor to assess your property’s value and calculate the premium for the lease extension. You can find more about valuation services here.
Serve Notice: Once you have a valuation, serve the Section 42 Notice to the freeholders, as mentioned earlier.
Negotiation: After the notice is served, the freeholders can respond with a counter-offer. This negotiation can be intricate, and it’s advisable to seek legal advice throughout the process.
Final Agreement: Once terms are agreed upon, you’ll need to formalize the extension through a legal document, usually managed by a solicitor.

What If the Freeholders Refuse?

If the freeholders do not respond to your notice or refuse your request, you have the option to take your case to the Leasehold Valuation Tribunal. This tribunal can help resolve disputes over lease extensions and determine a fair premium if negotiations stall. For more on this process, check our post about leasehold valuation tribunals.

Conclusion

In summary, even if other freeholders are not interested in extending their leases, you can still proceed with your own lease extension. Understanding your rights and the legal framework surrounding lease extensions will empower you to make informed decisions regarding your property. For further insights into leasehold matters, explore our comprehensive resources, including how to extend your lease and the lease extension guide.

For more information or assistance with your lease extension, don’t hesitate to reach out to our team of experts. Contact us.