Professional / Lease Extensions London

Lease extension is the continuation of a lease agreement beyond the original term. Most residential flat owners have had the right to extend their leases, for a number of years, so long as you meet all the criteria. As lease extensions are valuable, you may wish to consider applying for one - sooner rather than later.

If you are looking for a lease extension, below is some information and advice that you may wish to consider before you apply.

When is a Good Time to Get a Lease Extension?

Historically, long leases of residential property were granted for 99 or 125 years, with ground rents increasing every 25 or 33 years. During the 1980s, many houses were converted into flats and sold off on 99-year leases. Many flats that have not been extended yet should therefore have around 80 years left unexpired.

The best time to apply for a lease extension is before the lease term goes below 80 years. Over 80 years, the valuation provisions favour leaseholders; below 80 years, the premium payable increases significantly.

If you have missed the 80-year lease, however, most lenders will be looking for minimum terms in the range of 50-70 years, on the basis of a 25-year mortgage term. Variations between lenders do apply, but if you have less than 70 years to offer, the saleability of the property will be reduced.

With lease extensions, be aware of current market conditions and get a valuation report, but make your decision on the basis of your own circumstances.

Should I Get a Lease Extension?

If you have owned your flat for at least 2 years, and the original term of the lease is greater than 21 years, you have the right to extend your lease for 90 years at a peppercorn ground rent.

Purchasing a lease extension should be seen as a long-term investment, so you should consider the following pointers:

• Funds – Consider whether you have the funds available, and if not, if your current lender is willing to make a further advance
• Selling the Property – If you are planning on selling the property in the foreseeable future, you should consider a lease extension. A long lease term with a peppercorn (zero) ground rent will be more attractive to prospective buyers
• Existing Leaseholders – If there are other leaseholders in the building who wish to extend their leases, or sufficient support for an enfranchisement, you may wish to include them in applying for lease extension
• The Building – Consider whether other lease extensions have been completed in the same building. It could be advantageous as valuations would be simpler and the process easier to agree on with your landlord.

If you are considering getting a lease extension, Currell Chartered Surveyors in London can advise you through the valuation and negotiation of additional 90 year lease extensions and freehold purchases. Please give us a ring or come into our office at 309 Upper Street, Islington, London N1, and our staff will be happy to assist you.