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.

A Guide on How to Write a Lease Extension Letter in the UK

December 20, 2023

Quick Enquiry Form

In the realm of property ownership, the need for a lease extension can arise as the sands of time steadily run through the hourglass of your lease agreement. Writing a compelling and effective lease extension letter is a crucial step in initiating this process. In this guide, we’ll explore the intricacies of composing a persuasive letter tailored to the British context and the legal framework of the UK.

1. Understanding Lease Extensions in the UK

Before penning your request, familiarise yourself with the UK’s lease extension process. The Leasehold Reform, Housing, and Urban Development Act 1993 outlines the statutory rights for leaseholders to extend their lease. This legal foundation provides a framework for your request and ensures that your letter aligns with the regulations.

2. Open with a Polite Salutation

Begin your letter with a courteous salutation. Address the freeholder or managing agent by their appropriate title and include your details, such as your full name, property address, and lease details. This establishes a formal and respectful tone.
“Dear [Freeholder’s Name] or [Managing Agent’s Title],”

3. Clearly State Your Intentions

Articulate your intention to extend the lease clearly and concisely in the opening paragraph. Be transparent about your motivations, whether it’s to enhance the property’s value, secure a longer tenure, or address mortgage concerns.
“I am writing to formally request a lease extension for [Property Address], in accordance with my rights under the Leasehold Reform Act 1993.”

4. Specify the Proposed Lease Terms

Outline the terms you are seeking for the lease extension. Specify the desired length of the extension and any other pertinent details, such as ground rent and service charges. Refer to the Leasehold Reform Act to ensure your proposed terms are within the statutory guidelines.
“I propose extending the lease to [desired number of years], with ground rent to be [specified amount] and service charges in accordance with the existing agreement.”

5. Provide Supporting Information

Include relevant details that support your request. This may include recent property valuations, market trends, or details about improvements you’ve made to the property. Supporting your case with factual information strengthens your position.
“Enclosed, please find a recent property valuation and details of improvements made to the property, indicating its increasing market value.”

6. Express Willingness to Negotiate

Demonstrate a cooperative spirit by expressing your willingness to engage in negotiations. This fosters a positive and amicable tone, paving the way for a smoother dialogue with the freeholder or managing agent.
“I am open to discussing the terms further and am willing to engage in negotiations to reach an agreement that is fair to both parties.”

7. End with a Formal Closing

Conclude your letter with a formal closing, expressing appreciation for their consideration. Sign off with a polite valediction, reiterating your hope for a constructive discussion.
“Thank you for considering my request. I look forward to your response and a positive resolution to this matter. Yours sincerely, [Your Full Name]”

8. Send via Recorded Delivery

Once your letter is crafted, ensure it reaches the intended recipient securely. Sending it via recorded delivery provides proof of receipt and adds an extra layer of formality to the process.

Example of a Lease Extension Letter:

[Your Full Name]

[Your Address]

[City, Postcode]

[Email Address]

[Date]

[Freeholder’s Name or Managing Agent’s Title]

[Freeholder’s Address or Managing Agent’s Address]

[City, Postcode]

Dear [Freeholder’s Name] or [Managing Agent’s Title],

I hope this letter finds you well. My name is [Your Full Name], and I am writing to formally request a lease extension for the property located at [Your Property Address], in accordance with my rights under the Leasehold Reform Act 1993.

I have thoroughly reviewed the terms outlined in the Act and wish to propose an extension of [desired number of years] to my current lease. In line with the statutory guidelines, I propose maintaining the ground rent at [current amount] and adjusting the service charges to align with the existing agreement.

Enclosed, please find a recent property valuation conducted by [Name of Valuation Company], indicating the current market value of the property.Additionally, I have included a comprehensive list of improvements made to the property over the past [number of years], demonstrating its increasing market value.

I understand the importance of maintaining open communication throughout this process and am open to discussing the terms further. I am willing to engage in negotiations to reach an agreement that is fair and equitable for both parties.

I appreciate your consideration of this request and look forward to your response. I am hopeful that we can come to a positive resolution to this matter. If you require any additional information or documentation, please do not hesitate to contact me at [Your Phone Number] or [Your Email Address].

Thank you for your time and attention.

Yours sincerely,