HomeOwners Alliance logo

Become a member today to access our home helpline, discounted conveyancing, expert advice & legal service

extending your lease

Step by step guide to extending your lease

Extending your lease can be a long and complicated process. We run through what's involved, costs and how to get the right expert help so you can take charge of every step of your lease extension and avoid the common pitfalls.

Before I start, how much will it cost me?

It depends on the value of the property, the number of years left on the lease, the annual ground rent, the value of improvements done to the property paid by the leaseholder and external factors such as expected rate of returns on investments. It is a complex calculation, but also a subjective one which means it is open to negotiation – or decision by a tribunal.

While you can get an idea of the cost of buying up more years (referred to as the premium you have to pay to the freeholder for the extended years) with our lease extension calculator approaching a  valuation surveyor with experience of lease extensions will be worth the investment and stop you paying over the odds for your extension.

Want to know how much your lease extension will cost? Our partnered lease extension solicitors can give you a free estimate and provide advice you can rely on. Click here to find out more and speak to them today

On top of the cost of buying the extra years on your lease (the premium) you have to pay:

  • The costs of getting legal advice (your solicitor)
  • The lease extension valuation report (a surveyor)
  • Your freeholder’s reasonable legal and own valuation costs (yes, you are required by law to pay these)
  • Land Registry fees

 

Do I need legal expertise

Yes! It can be tempting to enter into informal negotiations with the freeholders to extend your lease. By coming to an informal arrangement, you usually only have to pay your legal and valuation costs, while taking the formal route will mean you have to pay both yours and the freeholder’s costs. But if ever the phrase “false economy” applies, it is here! You may be saving on legal costs but you could be paying thousands more for the lease extension than you should be and, in the worst case scenario, make your home unsaleable.

The main issue is that with an informal extension the freeholder can make changes to the small print of the agreement to their advantage, for example adding ground rent rises. When you choose the formal statutory route, your ground rent is reduced to nothing.  Another trick is to only grant you an extension back up to 99 or 125 years, whereas with the statutory route you will get your existing term plus 90 years.

Doing things formally also affords you better protection should things go wrong. As long as you’ve gone down the formal “statutory” leasehold route, if there are any disagreements in terms of costs or other disputes you can take your case to a property tribunal.  There are also time limits with the formal route to lease extension so your freeholder can’t drag their feet.

OK, so what do I need to do?

  • Step 1 – Inform the freeholder of your desire to extend the lease and that you will be pursuing the statutory route.
  • Step 2 – Appoint a lease extension solicitor with expertise in the field and who is a member of the Association of Lease Extension Practitioners (ALEP). Get quotes and compare costs. Our partner lease extension solicitors can provide advice you can rely on. Get in touch today.
  • Step 3 – Find a valuation surveyor with expertise in leasehold extension legislation and the local property market. Some solicitors, including our partnered firm Bonallack and Bishop, can put you in touch with surveyors they trust.
  • Step 4 – Make a formal offer. You will have to serve tenants’ notice – your solicitor will able to take care of this.
  • Step 5 – Pay the deposit if one is required by the landlord. This will either be £250, or 10% of the lease cost in the tenants’ notice, if that exceeds £250.  If the landlord does require a deposit, this will have to be paid within 14 days, so it’s important to have this money readily available.
  • Step 6 – Negotiate a price. Your solicitor will advise or can handle this.

If the freeholder doesn’t accept the amount you’ve offered you will have to negotiate. Then if you still can’t come to an agreement, you will have to apply to the First Tier Tribunal (Property Chamber). While cases going to the tribunal are relatively uncommon, they can be time-consuming and expensive, so it’s best to avoid this if you can.

How long will all of that take?

The process normally takes from three to 12 months, and it can be made quicker by efficient valuers, solicitors and other professional help, so choose these people wisely.

How can I keep the costs down?

  • make sure you extend your lease as soon as possible – especially before the 80 year point when it becomes more expensive to buy up more years
  • make sure you appoint a specialist solicitor for the right legal advice
  • make sure you instruct a specialist surveyor – so you get the right valuation premium and don’t pay over the odds

Is it worth trying to buy the freehold instead?

It could be worth buying the freehold on your home so that you own it outright. But there are complicated legal procedures and legal costs involved in this process and you will have to get over half of all the leaseholders to agree, which could be difficult if, for example, you live in a building divided into apartments. Read more about it in our guide Should I buy the freehold

Our chosen lease extension solicitors provide FREE initial telephone advice and a FREE ESTIMATE of how much your lease extension is likely to cost you – which will include a very rough estimate of the likely price of your premium, as well as the legal and valuation costs. Find out more and contact them today

For this and any other leasehold concerns, become a member of the HomeOwners Alliance to discuss your options with our friendly Home Helpline team.


Leave a comment




* required

16 Comments

  1. I have a flat (in a converted house) estate agents valued at £450k with a lease I want to extend from 71yrs to 99yrs. The freeholders have asked for £20k. The ground rent is negligible.
    1/ Is their offer reasonable?
    2/ If I can’t extend the lease in time will it affect remortgaging?

    Comment by Losan — March 7, 2016 @ 11:26 pm

  2. My comment after going through the lease extension process, is that leaseholders are easy rip off targets.

    Lease extension period of 90 years maximum is insufficient…it should be at lease double that.

    Buy a freehold property if you can as leasehold is a con.

    Comment by Kristen Edwards — March 7, 2016 @ 2:43 pm

  3. I saw a property for £75k I want to buy and rent out. On Zoopla the flat is said to be worth between £90-£100k. The flat has an unexpired lease of 85 years and the freeholder has said he’s happy to extend the lease back to 99years so only adding 14 years. My question is, is if I buy the property for £70-£75k is it worth me extending the lease back to 99years. I plan on selling it in 4 years so there will be a 95 year lease so in theory.

    Comment by Veleshia — February 27, 2016 @ 4:40 pm

  4. Hi,
    I have got 66 years left on my two bedroom flat which is in Friern Barnet. I was wondering how much It would cost?

    Comment by Caroline — February 11, 2016 @ 5:42 pm

  5. Hi have a flat for 10 years the lease it is going to expire in 6 month .my Servoyer report say I should pay 220 thousand but the land lord asking for 420 thousand . And the marketing price will be 230 thousand . What will happened if my land lord says I still want 420 thousand is it up to him? Please

    Comment by Tony — January 13, 2016 @ 10:38 pm

  6. My partner has just purchased a two bed bungalow & garage on retirement complex for £210,000. The lease has 70 years left and the previous owner got a price from the freeholder to extend the lease which my partner is continuing to progress. The freeholder offered a 40 years extension for £10,800 plus costs which with our solicitors costs comes to a fraction below £13,000. Do you think this is a reasonable price?

    Comment by Paul Flint — November 25, 2015 @ 12:44 pm

  7. HI there, I was negligent and my lease expires in 64 years, I called the freeholder and they said it can be extended, they will call a surveyor and get a valuation of the property and that they ‘normally grant a new 125 year lease’, if this is too expensive, can I ask for a 90 year lease instead? Do I have that right? Thank You.

    Comment by AJ — November 25, 2015 @ 10:33 am

  8. I am buying a repossessed flat for £53,500. It only has 56 yrs left on the lease. My solicitor has emailed me a document that shows a quote was obtained 3 month ago to add 90 yes to the lease for £17,500 plus all costs pax £2000. The flat is in reasonable condition needing around £7000 to bring it back to a good state of repair and rentable. Is it possible to question the excessive quotation and can I haggle for a more favourable price, regards
    Paul

    Comment by Paul — November 18, 2015 @ 6:14 pm

  9. I have recently extended my lease. The freeholder did not give me any idea of costs (solicitors hourly rate, surveyors costs etc.) these were requested as part of the completed negotiation. The day I had to complete the lease extension or go to tribunal I was given the completion statement. On top of the freeholders valuation fees and solicitors fee’s their was a fee for the freeholders management agents £350 to arrange for the freeholder a solicitor and valuer, explain the process etc. They also gave me an invoice for arrears which I can prove via bank statements had been paid. They did this at the last minute giving me no choice but to pay an extra £1000 approx on top of the valuation fees and solicitors fees of £350 per hour. Or apply to the court which could possibly cost several £1000’s with no guarantee of winning. I paid the invoice and I am now trying to claim under section 60 reasonable costs. My question is are the management fee’s of £350 to act as consultant part of the freeholders reasonable costs. ?

    Comment by Lesley — November 6, 2015 @ 11:47 pm

  10. Does the managing agent of a block of flats have the legal right to ask for copies of our lease if he currently does not have them?

    Comment by Pamela Jones — August 17, 2015 @ 10:00 am

  11. hi,

    I’m currently looking into extending the lease on my flat. When I bought it it was at 76 years, and I have owned it for 8 years.

    I have many questions but probably foremost among them is – how do people pay for the lease extension when it is in the tens of thousands? Where do people find the money if it is 10 / 15 / £20,000? Can the cost be absorbed in your mortgage borrowing or do most people just have to find and save the total sum in cash?

    Comment by Alistair — August 14, 2015 @ 10:27 am

  12. I am one of 5 freeholders in a block of flats. We all want to renew the lease which is getting towards 80 years.
    How much does this cost typically and can you recommend any websites/legal firms able to do this?
    Thanks

    Comment by Aimee — August 9, 2015 @ 8:29 pm

  13. Hi Victor

    You won’t be able to start extension negotiations under the formal route until you have owned the property 2 years, unless the seller has already started the process (serving a section 42 notice). You have the option to go down an informal route, but you are not protected and often end up worse off in the long run. I would recommend getting a proper valuation prior to proceeding and asking the seller to serve a section 42 notice, if they haven’t already done so. It could work out well, but needs more research on your part first. You are also unlikely to get a mortgage on this property so assume you are a cash buyer.

    Louise

    Comment by Louise Campbell — June 16, 2015 @ 4:11 pm

  14. Hi
    I am about to buy a flat left with 38 years on the lease. This is from a private seller and has led me to believe it only cost a few hundred pounds. The price is 40000.

    Is it advisable to proceed.

    Comment by Victor — June 14, 2015 @ 8:18 pm

  15. Anne, speak to a solicitor, a good solicitor should be able to negotiate that down on your behalf. I also saw on lease-advice.org on their lease extension page (under terms I think) something about the additional lease term being added to the current unexpired term and no further ground rent payable. I’m not sure the term of the lease just resets to 99 years. Although it may vary between informal negotiation and formal notice. This sort of thing requires experts and I’m afraid I’m not one of them!

    Comment by Sarah — April 27, 2015 @ 8:49 pm

  16. I have 72 years left on my flat valued £160000. My landlord is asking £20000 to renew it back to 99 years. Your calculators estimate around £10000. I am able to negotiate this price? Why would he be asking so much? My yearly groundrent has recently gone up to £250.

    Comment by Anne Saunders — April 22, 2015 @ 1:56 pm

Sign up to our FREE newsletter for latest advice, services and money saving offers

Sign up now

×

Don't Miss Out!


Sign up to our free newsletter for latest advice, services and money saving offers

Sign Up Image