Lease Extension

Bulk Lease Extension Round 4

If after reading this page you are interested in taking part in a bulk lease extension (you don't have to commit yet) then email ashburtontriangleresidents@gmail.com 

If you are an owner/part owner you are eligible for an informal lease extension, as Newlon has agreed to relax the 2 year threshold given the proximity to the 80 year window.  The cost of the lease is based on property value and the amount of time left on the lease, and in general (property price fluctuations aside) it gets more expensive to extend over time. After there are fewer than 80 years left on the lease there are additional costs to pay. Though you should confirm the length of your lease, the assumption is that many if not all of the flats were provided with 99 year leases, and so have approximately 81 years remaining as of mid-2024. One flat has recently experienced difficulties with sales despite having leases over the 80 years threshold, but we are not sure if this was an isolated issue.

There is an established formal process for extending a lease (called “the statutory process”) which is available to anyone who has owned 100% of their flat for 2 years of more. For anyone who has owned a percentage of their flat via shared ownership for more than 2 years (including 100% owners) Newlon also offer an informal process. The informal process is similar to the statutory process, is generally quicker and has fewer administrative fees, but has no option of negotiation over the premium paid to Newlon for the lease extension. One issue typically with the informal process is that landlords will seek to change the terms of the lease agreement, and increase ground rent and other charges, however Newlon has stated their intention to offer the same terms as a statutory extension.

You should consider your circumstances, and information on https://www.lease-advice.org/ to decide whether extending your lease is right for you right now, and which option is best for you. it is important to note that some fees are unrecoverable if you are unable to proceed, and so you should consider how you will be financing the extension (particularly with the current issues relating to mortgages within the building). There is also a change to lease extensions that is expected to come in this parliament, however it is not clear whether this will actually reduce costs related to leases in ashburton triangle as we do not have ground rent, haven't reached the marriage value threshold and are unlikely to buy out the building management due to Newlon owning the majority of flats. Before the second round proceeds we will ask for advice on this from the chosen solicitor.

For those that do want to extend their leases via the informal method we are working with Newlon to provide additional cost savings via bulk extensions. 

We have undertaken 3 rounds of lease extensions, covering around 55 flats.  There is a timeline along with costs from the 2020 extension process provided for budgeting purposes. The Premium payable depends on a number of things but you can estimate it via: https://www.lease-advice.org/calculator/. For the first two rounds this was heavily delayed by negotiations with Arsenal to remove a charge, but that has now been completed and should not affect future extensions. 

Also below is a flowchart to see the indicative process for each method. While the residents association will not manage individual applications, we are happy to organise and coordinate interested residents into groups that enable them to achieve the bulk-savings. 

Update 26/02/2025

Updates on fees:

• Newlon Admin Fees: £240 + VAT (normally £300+VAT)

• Newlon's Valuer's Fees: £297.50 + VAT (normally £350+VAT)

• Newlon's Solicitor's Fees: £535.50 + VAT (normally £595+VAT)

• Proposed Resident Solicitor's (YVA) fees: approx. £150

You can refer to the ATRA document that gives an indication of when these are payable (obviously the numbers above are more up to date than those shown in the document, and the premiums will have increased due to the time remaining).

Update on questions:

1. If a leaseholder is currently in dispute with Newlon would that be affected by the lease extension? I'm conscious that there was the loophole for the Building Safety Act which was closed, but wanted to check if that is going to be the case for any non-building safety act issues.  Newlon: Having a dispute with Newlon can affect lease extensions but this is dependent on the matter and subject to review on a case-by-case basis. For example, non-payment of rent /service charges/breach of the obligations in the lease. The loophole on Building Safety Act (BSA) 2022 has now been addressed and no longer will impact on lease extensions for qualifying leases. Where a landlord agrees to extend the lease, the BSA now ensures that the statutory protections cover leaseholders who have extended their leases. The BSA Act is relevant to only defects as described under the Building Safety Act 2022 resulting from works carried out in the 30 years before June 2022.

2. If leases reach 80 years around September, when is marriage value applied? is it at completion or valuation (assuming for some reason the process goes beyond September). Newlon: Marriage value is applied at valuation, and we advise valuation to take place before the 80years mark for it not to be applied. As long as we have a valuation before the 80years mark, we will honour transaction to completion within the 6month validity period from date of valuation and happy to extend if required for short period.

3. Can YVA give an indication of what leasehold reform may mean for this group. YVA: The biggest advantage to the proposed changes is the removal to marriage value – your properties do not pay marriage value in any event. The other saving is that the leaseholder will not be required to pay the Freeholder’s costs, however I would advise against waiting when the term is close to 80 years as it is unclear when these changes will come into effect and I am doubtful it will be a soon as we believe it to be.

I recommend each leaseholders looks into this and makes a personal choice as it is difficult to ascertain when the change will happen. In a nutshell though:

Pros to waiting:

• 990 year extension;

• Freehodler’s fees are not paid by leaseholder

Cons to waiting:

• Uncertainty as to when the change will become operative

• If they change the deferment rate this may impact terms above 80 years negatively;

• Already above 80 years and as such the biggest saving being removal of marriage value does not apply to Ashburton

Bulk Lease Extension Round 3

If after reading this page you are interested in taking part in a bulk lease extension (you don't have to commit yet) then email ashburtontriangleresidents@gmail.com (preferably before 05/05/2023)

If you have owned (or part owned) your flat for over 2 years then you can extend your leasehold lease.  The cost of the lease is based on property value and the amount of time left on the lease, and in general (property price fluctuations aside) it gets more expensive to extend over time. After there are fewer than 80 years left on the lease there are additional costs to pay. Though you should confirm the length of your lease, the assumption is that many if not all of the flats were provided with 99 year leases, and so have approximately 82 years remaining as of mid-2023. One flat has recently experienced difficulties with sales despite having leases over the 80 years threshold, but we are not sure if this was an isolated issue.

There is an established formal process for extending a lease (called “the statutory process”) which is available to anyone who has owned 100% of their flat for 2 years of more. For anyone who has owned a percentage of their flat via shared ownership for more than 2 years (including 100% owners) Newlon also offer an informal process. The informal process is similar to the statutory process, is generally quicker and has fewer administrative fees, but has no option of negotiation over the premium paid to Newlon for the lease extension. One issue typically with the informal process is that landlords will seek to change the terms of the lease agreement, and increase ground rent and other charges, however Newlon has stated their intention to offer the same terms as a statutory extension.

You should consider your circumstances, and information on https://www.lease-advice.org/ to decide whether extending your lease is right for you right now, and which option is best for you. it is important to note that some fees are unrecoverable if you are unable to proceed, and so you should consider how you will be financing the extension (particularly with the current issues relating to mortgages within the building). There is also a change to lease extensions that is expected to come in this parliament, however it is not clear whether this will actually reduce costs related to leases in ashburton triangle as we do not have ground rent, haven't reached the marriage value threshold and are unlikely to buy out the building management due to Newlon owning the majority of flats. Before the second round proceeds we will ask for advice on this from the chosen solicitor.

For those that do want to extend their leases via the informal method we are working with Newlon to provide additional cost savings via bulk extensions. 

We have undertaken 2 rounds of lease extensions, covering around 40 flats.  There is a timeline along with costs from the 2020 extension process provided for budgeting purposes. The Premium payable depends on a number of things but you can estimate it via: https://www.lease-advice.org/calculator/. For the first two rounds this was heavily delayed by negotiations with Arsenal to remove a charge, but that has now been completed and should not affect future extensions. 

Also below is a flowchart to see the indicative process for each method. While the residents association will not manage individual applications, we are happy to organise and coordinate interested residents into groups that enable them to achieve the bulk-savings. 

Flowchart for process of extending leases

To register your interest for this next round please email ashburtontriangleresidents@gmail.com (preferably before 05/05/2023)