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Why extend your lease?
Why extend your lease?
It can be hard to sell your the property you live in when the remaining lease term gets below 95 years. When it gets below 80 years it starts to make a significant difference.
Not sure how long left on your lease?
Download the leasehold title from HM Land Registry (£7).
You will need to submit this with your application if you choose to go ahead.
Your Legal Right
Your Legal Right
As a long leaseholder of a residential property (lease originally granted for 21 years or more) you are entitled under the Leasehold Reform Housing and Urban Development Act 1993 to extend your current lease.
LeasePlus90 provides free guidance and fixed cost practical help to make and track your application, saving you stress and money.
What does it Cost?
What does it Cost?
The cost for to extending your lease depends upon the value of the property and how long is remaining on the lease. The impact on value increases as the lease gets shorter. However the value of your property usually goes down more significantly if the lease has less than 80 years left and the cost to extend your lease goes up significantly.
If your lease has 80 or more years unexpired, you will have to compensate the landlord for
the loss of the ground rent remaining on your current lease.
the loss of the potential right to receive back the property at the end of the current lease.
the loss in any development or other value that is reduced due to the extension of the lease.
If your lease has less than 80 years unexpired, you will in addition need to pay the landlord a share (usually 50%) of the value that would be added to your property by extending the lease
For leases of 80 years or more the median cost is typically £4-6,000 (although can be more for higher value properties). This depends on the value and condition of your property and length of lease remaining.
There will also be legal and valuation fees to pay and this varies depending on your landlord (see below).
Lease extensions are usually exempt from Stamp Duty Land Tax (SDLT).
Mortgagees are often willing to allow borrowers to add these costs to their mortgage since invariably it improves the value of the property.
For further guidance you can visit Leasehold Advisory Service, which provides independent advice from the Government about this including an approximate price calculator.
The LeasePlus90 Service
The LeasePlus90 Service
Informal application + tracker £195
(if offered by landlord)
In addition to the free service, we will receive and check your application, provide an estimated cost to extend, serve notice on your landlord (where they accept informal applications) and set up your tracker. If we find your landlord does not offer informal route you can convert to formal by payimng the difference of £100.
Formal application + tracker £295
(s42 notice)
In addition to the free service, we will receive and check your application, provide an estimated cost to extend, serve a formal s.42 notice on your landlord and enter the dates in our tracker and receive check the landlord’s s.45 counter-notice. Where the counter-notice premium is close to your s.42 offer (within 10-15%), we will negotiate on your behalf using our data. Where the difference is greater we can arrange...
Professional valuation & negotiation £495
If the landlord's counternotice varies significantly from your s.42 offer, we can arrange a formal inspected valuation report and further negotiation (additional valuation fee £495).
Fixed price conveyancing £795
(or with mortgagee £995)
Once agreed you will need a solicitor to check through the new lease, and ensure compliance. Registration of the new lease costs an extra £90.
The extended lease
The extended lease
However you apply (see below) your lease will should be extended in the same way; as set out in the Leasehold Reform Housing and Urban Development Act 1993.
Abolition of the annual ground rent
Leases are extended for 90 years in addition to the length left on your existing lease.
On the same other terms as the existing lease but occasionally subject to minor modifications and certain statutory exclusions and additions
Landlords are entitled to insert a standard clause for redevelopment. This right does not arise until the end of the term of the existing lease and is subject to a court application and the payment of full compensation to the leaseholder for the full value of the remaining 90 years.
What to do next
What to do next
All qualifying leaseholders are entitled to follow the process set out in the Leasehold Reform Housing and Urban Development Act 1993 (the formal route). Some landlords also offer an informal process is also which can be simpler, less costly, and often quicker.
Choosing to follow either route does not commit you to proceed with extending your lease but the cost is likely to go up over time as the lease gets shorter and property values rise. Also the landlord's valuation and admin fee indicated below must be paid in advance and is not refundable so it is advisable not to proceed until you have or are able to put the necessary funds in place.
Monies owed to the Landlord
Monies owed to the Landlord
However, you apply, the landlord is entitled to require you to pay any outstanding ground rent or service/major works charges and you will do so before legal completion.
Finance
Finance
Before proceeding with the extension, it is advisable to make sure you can access or raise the necessary funds (e.g. from savings or remortgage) to pay the landlord’s premium and the statutory deposit (usually 10%). You may have to pay this before your flat has been sold.
Date of valuation
Date of valuation
Pease note the valuation and the length of your lease are fixed and calculated from the date on which you paid your invoice valuation fee under the informal route or the date of your legal s.42 notice if using the formal route.
Inspecting your property
Inspecting your property
If a formal valuation is required you will need to provide contact details for arranging an inspection of the property. Inspections take place 9am – 5pm Mon-Fri and take up to 30 mins. The valuer will not collect keys so we ask for you or someone you trust over the age of 18 to be in attendance during this time. The inspection requires photographs and measurements to be taken so access should be provided to all rooms/areas. You may be asked for evidence for the cost and installation date of any improvements.
In all cases it is advisable to use a solicitor to make and register the final changes to the lease and title with HM Land registry. Whichever route you choose, legal fees will be more if you have a mortgage on the property as the solicitor will also need to act for the mortgagee.
You can either use our conveyancing service or obtain an estimate from your solicitor but, as a guide, this could cost around £1,200 + VAT. Legal costs under the formal route (including service of official notices) are likely to be greater.
Further Queries
Further Queries
If you still have questions unanswered, please contact us and we will revert as quickly as possible. Alternatively you can call 01923 220002 if you need help with your application.
We work with most housing association and local authority landlords including:
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