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How much will my lease extension cost?
How to calculate the cost of a lease extension?
Owners of leasehold properties must fully understand the process of extending the lease and how to calculate the amount, as the renewal of the lease is often an essential part of maintaining the worth of the leasehold property. Even the property owners who have managed to stay on their lease for many years should ensure that they fully understand the consequences of their lease running short and know-how and when they should seek a lease extension.
Estimating the lease cost can be a daunting and confusing task. Fortunately, there are a lot of Lease extension calculators where you just have to put a few of the details and you can get the estimated amount for the lease extension. Leasehold Valuation Calculator or leasehold value calculator are created to offer homeowners a reasonable estimate of how much it would cost to renew the lease on their property. However, you should also remember that this tool is not an alternative for the opinion considered by the Chartered Surveyor, and anyone considering a lease extension should get professional advice.
Common FAQs about Lease Extensions and Lease Valuation
Before thinking of extending your lease you must establish whether or not you can extend it? Under the 1993 Leasehold Reform Act, almost all flat-owners are legally allowed to extend their lease for an additional 90 years. In order to be legally entitled to an extension, you must have owned the flat for at least two years. You don't have to live there, just own it. The shorter the remaining lease length the more the cost will be to extend it.
If you have less than 80 years left, the value added to the flat by extending the lease could be much more than just the cost of extending it. There's no urgency for those who have 90 years or more. However, you should start thinking about extending your lease, once your lease reaches 83 years.
Once your lease drops below 80 years then the cost for extending becomes even more expensive. That's because you will pay 50 percent of the 'marriage value' of the flat on top of the usual lease extension price after that. Marriage value is the amount of added value a lease extension will also add to your property.
You will need to provide various information about the property in order to undertake a calculation. This information is listed below.
- The lease length remaining
- Ground rent payable and when it changes
- Value of your property
The cost of extending a lease is partially tied to the property's value. Once the lease falls below 80 years, the landlord is entitled to receive 50 percent of the increase in property value also called "marriage value" that makes extending a short period lease more expensive.
In addition to the cost of extending the lease, leaseholders should factor in other expenses such as solicitors' legal costs and surveyors fees. The tenant must pay the legal and surveying fees of both the freeholders and their own so that these fees can add up to a considerable amount
The price depends upon several factors, including the value of the flat, the length of the lease and the ground rent. It also depends on the negotiation. It should be kept in mind that leasehold legislation is hideously complicated so that costs can vary massively.
You'll need to pay your surveyor’s fees, as well as freeholder's surveyor’s fees. Typically, surveyor’s fees are £ 400 to £900 and so it is wise to shop around and get quotes from different surveyors.
The lease extension valuation calculator on our website will give you a general estimate of the cost for a flat lease extension. These valuations are based on generically available data and do not take into account local factors which may affect the premium. It cannot give you the exact costs. The eventual cost of the new lease will be the premium plus the "reasonable" professional costs both your own and of the property owner. These costs could be significant, so be sure to get estimates from the professionals involved such as solicitors and surveyors before you decide to proceed.
