Where do I begin with the lease extension in the UK?
A residential 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. We provide many leasehold solutions that would suit you so why not give a try? Extending a leasehold property is our speciality.A leaseholder can ask their freeholders or owner for an informal lease extension by preference rather than the formal lease extension. Before starting with the lease extension, many leaseholders take expert advice so that the premium they are proposing has a fair prospect of being approved. Besides this, some may notice that the proposal offered by the freeholder is not favorable, for which they serve the formal lease extension process.
To start with the formal procedures, you need to have expert lease extension valuation, on which your lease extension negotiation depends. Following this, you can serve your Section 42 legal notice on your landlord. Before the legal notice, you must secure it entirely to complete the lease extension process. Below are the steps to be reviewed:
- Eligibility Test – for both freeholders and leaseholders
- Engaging and directing the professional lease extension valuers
- Having a lease extension valuation to estimate the premium
- Arranging your investments to pay the premium
- Planning your Legal Notice
- Be ready for the next step – contact your surveyor, who will guide you further.
What is a lease extension?
Lease extension valuation is the process executed by the surveyors. In which they do a home survey report keeping in mind various factors. That involves the exceptional term of the lease, ground rent cost, the housing market price, and its probability for an increase in value.
The valuation survey for your lease extension cost will include:
- The decline in the rate of the landlord interest(loss of ground rent).
- To obtain the property for a further 90 years, the premium for the landlord’s incompetence.
- The marriage value addition to the final cost if the existing lease session has dropped below 80 years.
Can I extend my lease?
Specific criteria should meet during lease extension; you could benefit from extending your flat or house lease 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 lease extension valuations. We have dealt with lease extensions in London as well as the rest of the UK. Extending a leasehold property is our specialty.
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Why should I consider a lease extension?
A lease is a depreciating asset. As the term of the lease decreases, its value decreases; therefore, extending the period becomes costlier.
It can sometimes be challenging to sell a property with a short lease because a mortgage provider may be reluctant to lend money against the short lease term.
Therefore, extending your lease could add thousands to the value of your flat and make it easier to sell. Why not try our quick lease extension calculator to see how much it will cost you. Extending a leasehold property is our specialty.
Claiming a Leasehold extension following the statutory procedure will reduce the rent to a peppercorn (nil). A lease extension valuation is essential as it modernizes outdated terms in some older leases.
When should I do a lease extension?
There is no one answer, but we might advise that you 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 on your flat 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 various variables, including the number of parties involved and agreement on the premium and specific terms. A timetable has to be followed for A statutory residential lease extension valuation. Matters generally take several months between the serving of notice to claim a lease extension and completion of the subject.
Residential lease extensions outside of the statutory procedure tend to take much longer because the landlord can (and often does) drag their feet as any timescales do not bind them.
How much does lease extension cost?
Unfortunately, it is not possible to indicate how much premium you would have to pay as no two lease extensions are the same, and each depends upon its own merits. However, you can get a “ballpark” figure by visiting our lease extension calculator and entering the details. Please note this is only a “ballpark” figure and so should be treated as such. to get an accurate figure, we will need to undertake a total valuation.
Can a lease extension be refused?
If you have decided to negotiate your lease extension, then there is no law that your landlord would refuse to extend your lease. The landlord may increase the lease extension cost but will not refuse to extend your home lease. While, if you have owned the house or flat for more than two years, you have the statutory right to extend your home lease.
Does lease extension add value?
Extending a shorter-term lease to a seeming length can figure thousands to your House buying price. Usually, the shorter the lease, the lesser the value. Generally, it is by 90 years when you extend. If your house has excessive ground rent, then raising your lease can increase its value.
If you want to make sure that your lease extension add value to your property then,
- You must follow the formal lease extension process.
- Extend when you have over 90 years left on your lease.
- Direct a complete lease extension valuation by an experienced lease extension valuer.
Do you pay stamp duty on lease extension?
Stamp duty refers to a residential lease extension similar to the other home buying. Whereas stamp duty applies to lease extensions, it’s questionable that you had to pay it. As if you are extending the lease on your particular single residential property, then you’ll be accredited 0% rate of stamp duty on the initial £125,000 cost of the lease extension. Hence, for example, if the lease extension cost was £10,000, you don’t have to pay any stamp duty.
How to ask for a lease extension?
To ask for a lease extension, you must propose a formal letter containing all the relevant details that would be helpful for your landlord to make a choice. The formal letter should cover,
- your name, residence address, and contact information
- Date when the lease extension application is submitted
- Length of the lease extension
- Reasons for extending the lease
- Suggest a date by which you want a decision, generally ten days to 2 weeks
What is section 42 notice lease extension?
A section 42 notice lease extension is a legal application from a leaseholder to extend their residential lease. According to the Leasehold Reform, Housing and Urban Development Act 1993, labels a leaseholder to a further 90 years on the peak of their left lease duration and reducing the ground rent to a peppercorn. The lease extension notice should recommend a premium value or cost for the right of extending the lease and also to ensure the suitable amount you will be permitted to negotiate. Other than that, you can take help from an experienced lease extension valuer.
What does short lease mean? Should I buy a flat with a short lease?
Less than 70 years left, on a flat from a shorter lease. Although, residents with even less than five years remaining or even lesser than that still get sold. Usually, shorter leases are noticed in the city areas where the number of flats is high. While, if you are thinking of purchasing a flat with a shorter lease, it is crucial to examine the laws and legal rights encircling buying the properties with such states and examine the property you will buy.
Are you thinking about selling your home, and are you concerned about extending your lease to increase its worth? It would be beneficial to start with the lease extension process quickly rather than exceeding. Since stated, present owners can process the lease extension and confirm the benefits to the new home buyer as a perk. Thus, the new home buyers would not suffer waiting for two years to become qualified.
You can also get advice in person by scheduling a 10-minute free consultation with one of our professional lease extension valuers. Call us at 01753542984.