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.

Shared Ownership Lease Extension in the UK: Exploring Your Options

April 30, 2021

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Shared Ownership Leasehold and Lease Extensions

Are you aware of what is shared ownership in lease extension, how it works? No, then you’re at the right place. Many people have the same confusion about how shared ownership relates to lease extension in the UK. Initially let us recall what is leasehold, Leasehold is an ownership of a resident for a long-term period. Generally, this could extend to 99 or more years and in this period the house can be sold or bought.

Leaseholders also have a statutory right to extend the flat lease if the term is exceeded more than 21 years. The value of the house shrinks down year by year till the lease expires. After which usually the ownership reverts to the landlord. A leasehold has the right and responsibility of all the interior and exterior residing of a flat. The leaseholders have to keep an eye on the maintenance and repairs of the entire flat.

What is Shared Ownership Leases?

In the same way as the leasehold ownership, there is another ownership named shared ownership. In which the leaseholders have the right to buy a share of the flat or a house and remunerate for that part of the property. Leaseholders possess the right to purchase multiple shares till it has 100% of proprietorship. At that stage, it would be converted from shared ownership to leasehold ownership. This ownership has come into existence for those who can’t purchase or manage to buy the full property. They can have a part of it at a great premium value. Substantially, it has been carried out by the housing associations of England as a section of their house ownership scheme.

Shared ownership of a residence has the statutory right to extend the lease and the landlord may have its approach and scheme plans. Leaseholders must look over with the landlord. It may vary depending on the landlord’s choices. From the Leasehold Reform Act 1967, has been stated that the shared ownership does not have the right to buy the freehold. It would be only preferable for those who cannot afford to buy the whole of the leasehold ownership. Hence, in shared ownership also the shorter lease issue will be there. The landlord has the right to take back the leasehold at any time. If the shared ownership is transferred to the landlord, then there will be no reimbursement given to the leaseholder.

Shared Ownership Properties and the Latest Updates

In the Leaseholder’s shared ownership of a flat, the leaseholder will have to manage all the maintenance and repairs of the flat. In a special case, if the property of the flat of leasehold is in the private sector, then the cost of the maintenance, like lane, corridors, and other improvements will be payable and will not charge to the leaseholder.

Homes England accepts shared ownership leases should have fundamental points to be focused on:

1. Restrain on selling and forbidding on sublease rental.

They do not permit sublease rental in any condition. Undergoing shared ownership lease, the landlord has the right to seize the leasehold ownership if they do not have 100% ownership. This conveys that if the leaseholder of the shared ownership wants to sell the freehold then he/she has to first recommend it to the landlord or to the buyer who has been suggested by the landlord. There are also new home rent review clauses upgraded.

If the landlord does not respond to the above right from the leaseholder in under 8 weeks then the leaseholder has the right to sell the freehold to any other buyer in the demand. For all the new sponsored finance for shared ownership houses provided through the low-cost homes program 2021 whereas the resale application proposal time period has been lowered down to 4 weeks from 8 weeks.

In the 2021 plan update, the Home programs came up with a new financial policy in which the shared ownership leaseholder will be benefitted. In which they have planned that the landlord has to pay the maintenance and repair cost to the shared leaseholders for up to 10 years in the newly constructed homes. There is also a mortgage section classification planned in support of the mortgage lender and for the shared ownership leaseholders. In which loans can be provided to the leaseholder for their shared properties with mortgage protection.

Few of the shared ownership leases of flats in the countryside limits the right of the leaseholder to buy the property shares to 80%, or in case if the leaseholder is permitted to transfer to 100% of the proprietorship then he/she has the responsibility to revert the property to the landlord or any other purchaser who is willing to buy. Besides this to the countryside allowance, a shared ownership leasehold house for aged people can restrict the property share to 75%.

As all the new granted financial support for shared ownership houses given by the Affordable Homes program 2021 – 2026 and presented through Section 106 is decreased from 25% to 10% and also included an additional progressive 1% staircase process.

To calculate the cost of a shared ownership lease of property you may check out our shared ownership lease extension calculator. It will give you an estimated cost of your shared lease property. Our Leasehold Valuations team can also help you and guide you in all kind of lease extensions and lease enfranchisements process. Contact us without any hesitation, schedule 10 minutes free consultation with one of our chartered surveyors to resolve your issues or queries related to shared ownership rights and government acts to it.