What is a lease extension?
A lease extension is a method by which a leaseholder extends the term of their lease. Leases of both flats and houses exist and are capable of extension.
Can I extend my lease?
Provided certain criteria are met you could benefit from extending the lease of your flat or house under the legislation.
Even if you do not qualify for a statutory lease extension, you can still possibly negotiate with your landlord on an informal basis to agree to terms for a lease extension.
Why should I extend my lease?
A lease is a depreciating asset. As the term of the lease decreases its value decreases and therefore the cost of extending the term becomes costlier.
It can sometimes be difficult to sell a property with a short lease because a mortgage provider may be reluctant to lend money against the short lease term.
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If you’re claiming a lease extension in accordance with the statutory procedure, then your rent will be reduced to a peppercorn (nil).
A lease extension valuation is additionally often seen as an opportunity to modernize outdated terms contained in some older leases.
When should I extend my lease?
There is no one answer, but we might advise that you simply extend your lease in advance of the term dropping below 80 years unexpired. If a lease term is below 80 years the value of extending the lease increases as a further ‘Marriage Value’ forms a part of the calculation of the premium.
How long does it take to extend your lease?
The time taken to increase a lease depends on a variety of variables including the number of parties involved and agreement on the premium and specific terms.
A statutory lease extension valuation is dictated by a timetable that has to be adhered to and matters generally take a number of months between the serving of notice for a claim of a lease extension and completion of the matter.
Lease extensions outside of the statutory procedure tend to take much longer due to the fact that the landlord can (and often does) drag their feet as they are not bound by any timescales.
How much does it cost to increase your lease?
There are a variety of online tools and calculators which will assist you with estimating the value of your lease extension and that we would refer you to the calculator on the Leasehold valuations valuations website please bear in mind this provides you with an estimate only.