You can extend your lease as many times as you want.
To obtain a Leasehold extension to your lease you have to pay a premium to your freeholder. This figure is determined by a surveyor, who calculates a proposed figure, based on a number of factors including the remaining term of the lease and the value of the property. This figure has to be negotiated with your freeholder and in statutory cases, where negotiations fail, it is determined by the Leasehold Valuation Tribunal. In addition to the premium, you will have to pay the professional fees of your solicitor and surveyor and also your freeholder’s valuation and legal costs as well. Our comparison service ensures that your professional fees are very competitive, whilst giving you the reassurance that the professionals you instruct are of a high quality. You will know the cost up front, giving you peace of mind by getting a quote now.
If your freeholder cannot be traced, then an application can be made to the County Court for the lease to be extended in the absence of the freeholder. You need to show that all reasonable efforts have been made to trace the freeholder. Although this work is also not standard, and therefore not covered by our quote, it may be a cheaper option in total, because the lease will normally be granted on the basis of the valuation in your Statutory notice, which will be lower than if a freeholder had put in a counter notice. Your solicitor will give you advice and an estimate of the additional charges, if this applies to you.
The property reverts back to the freeholder or other party above you in the chain of ownership.
Lease renewal applies to commercial leases of shops, offices and warehouses whereas lease extension applies to residential property such as flats and houses.
Marriage value is the additional value added to the collective value of the various levels of ownership of a particular property when extending a lease. So for example, the value of the flat should increase because it now has a longer lease but the value of the freehold will decrease because the freeholder has to wait even longer to get his property back. This will create a “total” value difference between the “before value” and the “after value”.
Marriage value is calculated by valuing each of the interests in a property before the lease extension and then again after the lease extension will take effect. The difference between the two values is known as “marriage value”.
It is not calculated; it is agreed between the freeholder and first buyer of a property and is then stated in the lease and will apply for the duration of the lease and so any subsequent purchasers will have to abide by the rents stated in the lease. However, once a lease is extended a new agreement is reached between the freeholder and the current leaseholder for the rent going forward. If the lease is extended in the statutory manner then the ground rent is reduced to a peppercorn (which is effectively £1) per year.
If your lease is extended under the Leasehold Reform, Housing and Urban Development Act 1993, the ground rent will become a peppercorn (effectively £1 per annum) until the lease expires. If the lease is extended informally without the protection of the Act, you may negotiate an increased ground rent, or agree to more ground rent reviews in return for your freeholder agreeing to the extension.