Blog

by Linda Kirk

Most houses are freehold, but most flats are leasehold. When you buy a leasehold property, you’re purchasing the right to inhabit it for the term of the lease, not the property itself. Here are some frequently asked questions about extending your lease:

Lease Terms and Importance of Extension

• Lease Duration: Lease terms can vary significantly. Some are for 999 years, while others are for 99 or 125 years.
• Why Extend?: If your lease term drops below 90 years, consider extending it. Extension becomes more expensive as the lease shortens, especially under 80 years. Most lenders require a minimum of 55 years plus mortgage terms.
• Marketability: As leases near their end, the property’s marketability and security for a mortgage are affected.

Historical Context

• Growth in Leasehold Properties: Since the 1950s and 1960s, leasehold properties have increased, especially in cities like London. Many early leases were for 99 years, while modern flats and ex-local authority flats typically have 125-year terms.

Steps to Extend Your Lease

• Eligibility: You must own the property for two years to qualify for a lease extension under the legislation.
• Notice of Claim: After qualifying, serve a ‘Notice of Claim’ on the freeholder. Consult a qualified Valuer first to estimate the premium.
• Valuation: The Valuer will provide an estimated premium and best/worst-case scenarios.
• Selling with Notice: The Notice can be assigned with the lease if the flat is sold, allowing the buyer to proceed immediately with the extension.
• Negotiations: If the landlord demands a higher premium than estimated, the Valuer can negotiate.

Legislative vs. Voluntary Lease Extension

• Legislative Route: Grants an additional 90 years and reduces ground rent to zero.
• Voluntary Extension: Negotiated directly with the landlord, avoiding legislative timelines but with less negotiating power and potentially higher costs.

Buying a Leasehold Property

• Check Lease Terms: Always check the lease term and ground rent before purchasing.
• Cost Consideration: Leases below 100 years can be costly to extend. Estimate future extension costs before committing.
• Legal and Valuation Fees: Leaseholders are liable for both the landlord’s and their own fees, making it an expensive process.

Importance of Legal Advice

It is crucial to seek legal advice when extending your lease or purchasing a leasehold property. Proper guidance can help avoid costly mistakes and ensure a smooth process.

For expert legal assistance, contact Linda Kirk. Linda can guide you through the complexities of lease extensions and ensure you make informed decisions.

Contact Adkirk Law:

Linda Kirk – Director Adkirk Law
0330 111 9728
Linda.Kirk@adkirklaw.co.uk