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.

Freehold vs. Leasehold

August 18, 2023

Quick Enquiry Form

When purchasing a property, you will come across two main types of ownership: freehold and leasehold. Understanding the fundamental differences between these forms of homeownership is essential to making an informed decision that aligns with your needs and budget. In this guide, we will delve into the intricacies of freehold and leasehold ownership, examining the advantages and disadvantages of each. By the end, you will be equipped with the knowledge to confidently choose the right property ownership type for you.

Calculate Initial Leasehold Extention Cost with Our FREE Online LEASEHOLD EXTENSION CALCULATOR

Freehold Ownership

What is Freehold?

Freehold ownership means you own the property and the land on which it stands indefinitely. As the freeholder, you have full control over your property, responsible for its maintenance and repairs without any third-party interference.

Advantages of Freehold Ownership:

a. Absolute Ownership:

You hold the title absolute, granting complete ownership and control over the property

b. No Annual Charges:

Unlike leasehold, there are no ground rents, service charges, or annual fees to be paid to a freeholder.

c. Freedom in Decision-Making:

You have the authority to make changes or improvements to the property without seeking permission.

d. Long-term Security:

Freehold ownership ensures long-term security, as there is no lease expiration or need to extend.

Disadvantages of Freehold Ownership:

a. Maintenance Responsibility:

As the freeholder, you are solely responsible for all maintenance and repair costs.

b. Higher Upfront Cost:

Freehold properties generally have a higher upfront cost compared to leasehold properties.

Leasehold Ownership

What is Leasehold?

Leasehold ownership entails owning the property for a specified number of years, months, or centuries, but not the land it stands on. You enter into an agreement with the freeholder, known as the lease, to use the property for the lease duration.

Advantages of Leasehold Ownership:

a. Lower Initial Cost:

Leasehold properties are often more affordable upfront, making them accessible to a wider range of buyers.

b. Shared Maintenance:

The freeholder is typically responsible for maintaining common areas, reducing the burden on the leaseholder.

c. Affordable Locations:

Leasehold properties might allow you to buy in sought-after locations at a lower price than freehold properties.

Disadvantages of Leasehold Ownership:

a. Limited Control:

As a leaseholder, you must seek permission from the freeholder for significant changes or improvements to the property.

b. Ground Rent and Service Charges:

Leaseholders are obligated to pay ground rent and service charges as stipulated in the lease agreement.

c. Lease Expiration:

Once the lease ends, the property returns to the freeholder unless the lease is extended, affecting property value.

Choosing the Right Ownership for You

Factors to Consider:

a. Budget:

Assess your budget to determine whether a freehold or leasehold property is more feasible.

b. Property Type:

While most houses are freehold, flats and apartments are commonly leasehold.

c. Location:

Leasehold properties may offer opportunities to buy in prime locations at a more affordable price.

d. Long-term Plans:

Consider your long-term plans and how lease expiration might impact your investment.

Obtaining Professional Advice:

a. Consulting Surveyor:

Seek legal advice from Surveyor specializing in property law to review lease agreements and provide guidance.

b. Lease Extension Valuation Experts:

Engage professionals to assess the lease extension cost if you are considering a leasehold property.

Quick Tip

Consult Leasehold Valuations Experts for LEASE EXTENSION
and BUYING SHARE OF FREEHOLD In Slough, UK.

Conclusion:

Choosing between freehold and leasehold ownership is a critical decision when buying a property. Freehold ownership grants absolute control and long-term security, but it comes with the responsibility of maintenance. On the other hand, leasehold properties might be more affordable upfront, but lease expiration and ground rent can pose challenges. Assess your needs, budget, and long-term plans carefully, and seek professional Leasehold Valuer advice to ensure you make the right choice for your property ownership. With the right knowledge and guidance, you can secure a property that aligns with your lifestyle and financial goals, creating a foundation for a prosperous future.