As a leaseholder you may want to extend your lease.

If your lease drops below 80 years it can become more expensive to extend it, and future buyers of the property may find it difficult to secure a mortgage.

Do I qualify for an extension?

  • He/she owns a long lease (a lease for a term of years in excess of 21 years from when it was originally granted);
  • He/she have owned it for at least two years;
  • He/she is not currently in breach of their lease.

How to request an extension

The leaseholder serves an initial section 41 notice or sends a letter to the leasehold team or emails confirming their interest in extending the lease. At this stage, there is no liability for costs. It would also be a good idea to get independent legal advice.

Legal costs             

Once the process begins, you are responsible for paying:

  • the cost of the valuation report - £1,300 plus VAT;
  • the landlord’s administration fee - £225.00 plus VAT;
  • the landlord’s legal fees.  - £600 plus VAT;
  • the premium for the lease extension itself.

How to calculate your lease years

When working out how many years are left on your lease, you must use the commencement date of the lease and not the date you purchased the property.

How many years is added to the lease

You have the right to add 90 years to what is left on the existing lease at a ‘peppercorn rent’. A peppercorn rent means that no ground rent is paid. For example, if the present lease had 70 years left to run, the new extended lease would be for 160 years.

The premium

The premium is the sum of money that the leaseholder pays in exchange for a longer lease. An average premium with approximately 80 to 90 years left on the lease, can cost from £2500 to £25000. The valuation of the premium is based on the remainder of the lease term and the property value. This will be provided to Charnwood Borough Council by the district Valuation office.

Selling your property

If you are selling your flat and the purchaser has indicated they would like a longer lease, you do not have to extend the lease before you sell. Instead, you could serve a Section 42 Notice before selling the flat and apply for a lease extension.

This document can be assigned by the solicitors to the new lessee and forwarded to Charnwood before the sale completes. If this isn’t done, then the new owner would have to wait two years before they can apply themselves.

Last updated: Wed 9th August, 2023 @ 14:40