Lease Extensions

With a reputation as one of the UK's largest, fastest growing, and most popular property law firms, we are an ideal choice if you need to extend your lease.

With over 30 lawyers who specialise in and have experience with lease extensions, and over 10 office locations in London alone, we will get the job done for you as quickly and proactively as possible at a competitive cost.

What is a lease extension and why is an extension needed?

The main reason prompting the need to extend a long lease is when selling (because your buyer will probably need a mortgage) or remortgaging.

If your lease drops below around 80 years, many mortgage lenders won’t lend on it, and buyers may not want to buy it. This makes it harder to sell or remortgage. Extending the lease keeps the property marketable and its value stable.

If you have owned the long leasehold of your flat for more than 2 years, your freeholder cannot prevent you from extending the lease for an additional 90 years. This is known as the section 42 process.

How much does a lease extension cost?

The premium payable to extend the lease will vary upon factors including the length of the lease and the value of the flat. If you cannot agree a premium with the freeholder, there is a statutory formula for calculating what the premium should be depending on some variables, not least the number of years left.

If your lease already has less than 80 years left, the cost can increase quite a lot based on a statutory calculation and formula known as “marriage value”.

In addition to your own legal and surveyor fees, you will also have to pay the freeholder’s legal and surveyors fees.

Overall, you should expect to pay professional fees of not less than £5,000.00 plus VAT.

Informal or statutory process?

It’s common for leaseholders to start with the informal route by approaching the freeholder to negotiate a lease extension. If the freeholder refuses, delays, or suggests unfair terms, you can then also start the formal (statutory) process, whilst potentially continuing to negotiate informally.

Once agreed, the new lease terms are set out in a legal document called a deed of variation or new lease. If you have a mortgage, your lender must give consent to the new lease terms. Finally, the new lease is registered with the Land Registry to make it official.

It generally takes several months to get a lease extension completed.

In simple terms the statutory process is :-

• You must have owned the flat for at least 2 years.

• You serve a legal notice (called a Section 42 notice) on the freeholder, saying you want to extend.

• The freeholder replies with their price and terms.

• You each get a surveyor to help agree a fair price.

• If you can’t agree, you can go to a tribunal.

It's rare for lease extensions to end up with a Tribunal determination.

What about share of freehold properties?

With many converted houses, the freehold was also transferred to the leaseholders at the time the flat leases were created. In that situation, leaseholders also own a share of the freehold either registered in the names of all the current long leasehold owners or a company has been set up to own the freehold.

In a shared freehold situation, it is generally not in any of the leaseholders interests to charge each other to extend leases, as all will need to extend. In this situation, the common approach is to extend all the leases at the same time, with legal fees and lenders fees for a deed a variation being the only cost.

We are often instructed to act for all leaseholders in this situation, so please do contact us.