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Lease Extensions

We offer both Landlords and Tenants clear and accurate professional advice on Lease Extensions to ensure that the process can be completed as easily as possible.

Our involvement in Lease Extensions often starts with preliminary advice over the telephone, but in all cases we will carry out an inspection of the property to be valued and prepare a detailed report that will set out the full statutory calculation and explain the process.

Negotiations and representation at the First Tier Tribunal to resolve disputes can similarly be undertaken on a fixed fee basis.

Frequently Asked Questions


A lease extension is the process of adding years back onto the lease and extending the time you have before the property goes back into the ownership of the Landlord.

You can do this by negotiating directly with the landlord or by serving a Section 42 Notice (which we recommend you have an experienced solicitor do on your behalf).


You can find out how long your lease has left to run by downloading the leasehold title from the Land Registry website.
Anyone deemed to be a ‘qualified leaseholder’ can apply for a lease extension.

You are deemed ‘qualified’ if:

a) You’ve owned the property for at least 2 years

And…

b) The original lease granted was for a term in excess of 21 years

Subject to meeting the above criteria you can force the landlord to extend the lease on attractive terms.
Under the above act ‘qualified leaseholders’ are entitled to an extra 90 years on top of what remains on the lease and with the whole of the term being at a peppercorn (nil) rent.

So, if 75 years are left to go, a new lease of 165 years (90 plus 75) can be granted in substitution for the existing lease, with no rent to pay throughout the whole term.

In return, the Landlord is entitled to a ‘premium‘ (lump sum of cash) for the lease extension.

The size of the premium is subject to negotiation but based on a formula set out in the Leasehold Reform Housing & Urban Development Act 1993.

The leaseholder also has the right to:

  • To know the freeholder’s name and address.
  • To be given information about insurance costs.
  • To see how service charges are calculated and how the money is spent, with receipts if requested.
  • To be consulted via a Section 20 consultation about charges if you have to pay more than £250 for planned work, or £100 per year for work lasting more than 12 months. You may dispute any charges you feel are unreasonable, of if the work is not carried out to an acceptable standard by applying to a tribunal.
  • To join with other tenants and collectively acquire the freehold of their block, whether or not the landlord wishes to sell.
Once your lease drops below 80 years, it becomes significantly more expensive to extend due to ‘marriage value’.

Marriage value


This is basically the increase in the value of the property thanks to the lease extension.


The Landlord is entitled to 50% of it when a lease with less than 80 years left is extended.
e.g. If the property is worth £125,000 with a 60 year lease and then valued at £160,000 with a 150 year lease, the marriage value is £35,000 (£160k-£125k) and the Landlord is entitled to a payment of £17.5k (50% of £35k).


Extending your lease before selling


Whether to extend your lease before selling depends largely on how long you have left on the lease and how soon you need to sell.


Time left on the lease (rules of thumb):


  • +90 years = Not worth extending
  • 90-85 years = Worth extending (improves saleability)
  • 85-80 years = Worth extending or at least get the process started*
*This is important because the new owner will not be able to request an extension for two years, by which time the lease could be shorter than 80 years, at which point it suddenly becomes much more expensive to extend and this could affect the value you sell the property for.

Mortgage-ability


  • Below 80 years, and the number of lenders willing to offer mortgages against the property starts to drop away.
  • Only a handful of lenders will lend and the terms would be less favourable (i.e. lower loan to value and a higher rate).
  • Below 60 years, it may well be impossible to get a mortgage of any type at all.
Saleability is effected

  • Your property will be harder to sell if buyers can’t secure a mortgage against it.
  • Your pool of buyers will be limited to cash house buyers only who are fewer in number and tend to be most interested in bargains.