What is a leasehold extension?

A leasehold extension is the process of extending the lease term of a property held on a leasehold basis. It helps maintain the property's value and desirability. Leasehold extension legislation allows leaseholders to extend their lease, ensuring the property remains attractive for sale or mortgage purposes.

How long is a leasehold extension ?

The length of a leasehold extension can vary depending on the jurisdiction and specific circumstances. In some countries, such as the United Kingdom, leasehold extensions are typically granted for an additional 90 years beyond the remaining term of the existing lease. However, it's important to note that leasehold extension regulations can differ, and it's advisable to consult local laws or seek professional advice like leasehold valuations for accurate information regarding leasehold extensions in a specific jurisdiction.

What are the benefits of lease extension ?

Extending the leasehold of a property offers benefits such as increased property value, improved marketability, easier access to mortgage financing, peace of mind and security, the avoidance of escalating costs, and more control over property management.

What happens to leasehold property after 99 years ?

After 99 years, the leasehold property typically reverts back to the freeholder, unless the lease is extended by the leaseholder. The ownership of the property, along with the land it is built on, returns to the freeholder once the lease expires. As a lease approaches its expiration, the property’s value may decrease, making it more challenging to sell or mortgage. It is advisable for leaseholders to consider extending their lease well before it reaches the 99-year mark to maintain the property’s value and their ownership rights.

Why choose leasehold Valuations for Lease extension or Buying Freehold ?

1. Fair Price: A leasehold valuation ensures you pay a fair price for a lease extension or freehold purchase.2. Increased Property Value: Extending the lease or buying the freehold can potentially increase your property’s value.3. Cost Savings: Accurate valuation helps minimise future costs like ground rent.4. Stronger Negotiation: A valuation report strengthens your position during negotiations with landlords.5. Legal Compliance: Valuations ensure you meet legal requirements for lease extensions or freehold purchases.6. Future Planning: Valuations help you plan for selling or passing on the property to future generations.7. Expert Advice: Engaging a valuer provides access to their expertise and guidance.8. Mortgage Support: Valuation reports improve your mortgage opportunities for lease extensions or freehold purchases.

How much does it cost to renew a leasehold ?

The cost of renewing a leasehold in the UK can vary depending on various factors, such as the property value, the length of the renewal term, and any negotiations between the leaseholder and the freeholder. Unlike extending a lease, which typically involves paying a premium to the freeholder, renewing a lease generally involves paying a nominal fee known as a “peppercorn rent” or a small percentage of the property value.The exact cost of renewing a leasehold will depend on the specific terms agreed upon between the parties involved. It is advisable to consult with a solicitor or a licenced conveyancer who specialises in leasehold matters to get an accurate estimate of the costs involved based on your particular situation.

Q. How much does it cost to extend a leasehold in uk ?

The cost of extending a leasehold in the UK can range from a few thousand pounds to tens of thousands of pounds, depending on factors such as the remaining lease length, property value, and negotiated terms with the freeholder. Additional costs include legal fees, valuation fees, and disbursements such as Land Registry fees. It’s recommended to seek professional advice for an accurate estimate based on your specific situation.

Why Would Anyone Buy a Leasehold Property? Key Reasons Explained

May 10, 2025

Quick Enquiry Form

For many homebuyers, the idea of purchasing a leasehold property may seem less appealing compared to owning a freehold. However, leasehold properties still make up a significant portion of the UK housing market, particularly in urban areas. So, why would anyone buy a leasehold property? There are several practical reasons that make leasehold ownership a viable choice, from affordability to location advantages.

1. Understanding Leasehold Ownership

Before diving into why people buy leasehold properties, it’s important to understand what leasehold ownership means. Unlike freehold ownership, where you own both the property and the land it stands on indefinitely, leasehold ownership means you own the property for a fixed period but not the land. The land remains under the ownership of a freeholder (also known as the landlord), and leaseholders often have to pay service charges, ground rent, and maintenance fees.

Despite these restrictions, leasehold properties offer several advantages that make them an attractive choice for many buyers.

2. Affordability Compared to Freehold

One of the primary reasons why anyone would buy a leasehold property is affordability. Leasehold flats and apartments tend to be significantly cheaper than freehold houses. This makes them a practical choice for first-time buyers and those looking for a more affordable way to enter the property market.

Additionally, leasehold properties often come with lower initial costs, making them a feasible option for those who want to buy in prime locations without paying the premium for freehold homes.

3. Prime Location Benefits

Most flats and apartments in city centers or high-demand areas are leasehold. Purchasing a leasehold property allows buyers to live in sought-after locations where freehold houses might be rare or unaffordable. For professionals, students, and those who prefer urban living, leasehold properties offer an opportunity to stay close to workplaces, universities, and transport links.

4. Lower Maintenance Responsibilities

Leasehold properties, especially those in managed buildings, come with shared maintenance and repair responsibilities. The freeholder or a management company typically takes care of communal areas, external repairs, and amenities like lifts, gardens, and parking facilities.

This can be a major advantage for buyers who don’t want to deal with maintenance themselves. Unlike freehold properties where the homeowner is responsible for all upkeep, leasehold flats provide convenience and less personal responsibility for external repairs.

5. Access to Amenities and Security

Many leasehold properties, particularly those in modern developments, come with additional amenities such as:

24/7 security and concierge services
Gyms and swimming pools
Shared gardens and recreational areas

These amenities make leasehold properties attractive, especially to young professionals and retirees who prioritize convenience and lifestyle perks.

Also, learn more about the The Importance of Leasehold Property Inspections

6. Better Mortgage and Investment Opportunities

Despite some misconceptions, securing a mortgage for a leasehold property is relatively straightforward, provided the lease term is long (typically over 80 years). Many first-time buyers opt for leasehold properties due to the availability of government-backed mortgage schemes, such as Help to Buy.

For investors, leasehold properties in high-demand areas can generate solid rental income. The rental yield in city centers is often higher for apartments than for houses, making leasehold properties a good option for buy-to-let investments.

7. Developer Incentives and New-Build Opportunities

Many new-build homes and apartments are sold as leasehold. Developers often provide incentives such as:

Assistance with deposits
Stamp duty contributions
Free furnishings or upgrades

For buyers looking for a hassle-free purchase, these incentives can make leasehold properties an attractive choice.

8. Leasehold Reforms Making Ownership Fairer

Recent government reforms are making leasehold ownership more attractive by tackling unfair practices. The Leasehold Reform (Ground Rent) Act 2022 banned excessive ground rents for new leases, and the Leasehold and Freehold Reform Act 2024 introduced further changes, such as:

Making it easier to extend leases
Reducing the cost of buying a freehold
Increasing transparency in service charges

These reforms ensure that leasehold ownership is becoming more secure and beneficial for homeowners.

9. Things to Consider Before Buying a Leasehold Property

While there are many benefits to leasehold properties, buyers should be aware of potential drawbacks, including:

Lease Length: Ensure the lease has a long duration (ideally 100+ years) to avoid expensive extensions.
Service Charges and Ground Rent: Check the annual costs and any potential increases.
Restrictions: Some leaseholds have restrictions on renovations, pet ownership, or subletting.

Doing thorough research and seeking legal advice can help buyers make an informed decision.

Conclusion

So, why would anyone buy a leasehold property? The answer lies in affordability, prime location, lower maintenance responsibilities, access to amenities, and government reforms improving leasehold ownership. For many buyers, particularly first-time homeowners and city dwellers, leasehold properties offer a practical and financially viable option.

With increasing leasehold reforms providing more protections, leasehold ownership is becoming an increasingly attractive choice. If you’re considering purchasing a leasehold property, ensure you understand the lease terms and financial commitments to make the most informed decision.