How do I extend a lease on a leasehold property?
Leaseholders who own flats can either extend their leases under the law if they meet certain criteria (formal route), or by asking the freeholder to see whether they are willing to negotiate a lease extension informally (informal route).
How much value does extending a lease add?
It’s always difficult to predict the exact difference in value between a short-lease flat and one with a long-lease. A good rule of thumb is that extending the lease of a flat with 70 years remaining will increase its value by around 10 to 15 per cent.
Is it difficult to extend a lease?
It’s usually then easy and cheap to extend the lease of your property at the same time, and you can normally do so up to 999 years. As a rule of thumb, the cost of a share of freehold for one flat (excluding legal fees) is similar to extending a lease by 90 years.
Can a lease extension be refused?
If you decide to try to negotiate a lease extension, there are no rules and your landlord could refuse to extend your lease, or set whatever terms they like. For example, they may want to increase the ground rent as one of the terms.
How long does it take to extend a lease on a flat?
The entire leasehold extension process normally takes from three to twelve months but it can be made quicker with professional help from efficient valuers and solicitors. The first thing to establish is that you are eligible for an extension.
Why are lease extensions so expensive?
The cost of extending a lease relies on a concept called relativity, which describes how the value of the home drops as the lease term runs down. The lower the relativity, the more it costs to extend the lease. And that means that leaseholders who pay to extend their leases could be paying thousands of pounds too much.
When should you ask to renew a lease?
Double-check your lease end date to make sure you’re asking for a renewal at the right time. It’s best to offer a renewal 90 days before your lease expires. This gives you and your tenants 30 days to figure out if you’re moving forward with the renewal or not.
What happens if your lease runs out?
If you have a leasehold flat, you do NOT have ownership of it. At all times the ownership of the property remains with the freeholder (landlord). When a lease runs out, you no longer have tenancy, and the freeholder has full use of the property again.
What happens when a lease on a flat runs out?
Do you have to wait 2 years to extend a lease?
Once you have owned the flat for two years, you have the right to a lease extension. This means that the buyer will not have to wait 2 years to extend the lease. This has to be done at the same time as the purchase of the property is going through.
