Step by step guide to extending your lease
This information on extending your lease will give you a brief outline of the process and the costs involved. The information provided does not cover every lease extension case and is not meant to describe or give a full interpretation of the law, as only the courts can do that.
Why should I consider extending my lease?
What is a lease term?
When you own a leasehold property you are granted a lease term. The lease term is the amount of years that you own on the lease of a particular property. On a new property the lease term will usually 99 or 125 years.
What happens if I don’t extend my lease?
The longer you own the property the less time there will be left on the lease. As the years of the lease reduce, the value of the property also reduces. So, the less time left on the lease, means the less valuable the property becomes.
Properties with short lease terms often experience difficulties when being sold. If a mortgage is required, the purchaser may find it difficult to secure a mortgage as mortgage providers often do not lend on properties with short leases.
If the lease is not extended, eventually your lease term will end. If this happens the property will revert to the freeholder.
For these reasons the law gives you the right to extend your lease once you have owned it for two years.
What is the Premium?
The Premium is the price the landlord is entitled to for extending the lease. The premium is based on a formula set out in the Leasehold Reform Housing and Urban Development Act 1993 (the 1993 act).
How much will it cost me to extend my lease?
Cost of the Premium
The cost of the premium for extending your lease will depend on the value of the property, the number of years left on the lease, the annual ground rent and the value of improvements done to the property paid by you.
As you know the longer you own the property, the less time there is left on the lease. The less years on the lease means the cost of the premium is higher.
You can get an idea of the cost of the premium by visiting the website links:
In addition to the costs of the premium, you will have to pay:
- The costs of getting legal advice (your solicitor)
- Longhurst valuation report
- Longhurst solicitors legal costs
- Longhurst administration fee
What is Marriage Value and when is it payable?
If you extend your lease with less than 80 years remaining there is an additional fee that you pay to us. This fee is called a Marriage Fee.
When you extend a lease with a remaining term of 80 years or more, no marriage fee is payable. You should always look to extend a lease before it hits the 80 year mark for this reason.
Do I need legal expertise to extend my lease?
Extending a lease can be confusing and expensive, we always recommend that you seek professional legal advice by way of contacting a solicitor. If you do not seek professional advice you might find the lease extension process longer and potentially more expensive.
How long will it take to extend my lease?
Under the Leasehold Reform Housing and Urban Development Act 1993 there are strict time lines which need to be adhered to by both parties.
The process of extending your lease normally takes from 3 to 6 months
How can I keep lease extension costs down?
The more years you have to buy, the higher the cost of the premium will be. To help reduce the cost of extending your lease you should request a lease extension as soon as possible. If your lease has less than 80 years remaining the costs of the premium will be substantially more than if you extend your lease with more than 80 years remaining.
What are the steps to extending my lease?
This depends on the type of property you own. Please click on one of the links below for more information:
- Flats who own 100%
- Houses who own 100%
- Retirement Living Bungalows who own 100%
- Retirement Living Flats who own 100%
- Retirement Living Shared Owners
- Shared Owners
- I Don’t know what type of property I own