Property Lease Extensions
If you own your property on a leasehold basis, this means that you hold a contract with the freeholder, which details how long you can live there, and how much ground rent must be paid. The term on the lease reduces each year and, should you not extend the lease, it would eventually reach 0. At this point, the freeholder would gain full ownership of the property. What’s more, as the leasehold reduces, as does the value of your property.
Leaseholders are legally entitled to extend their lease with the freeholder by 90 years, as long as they have owned a long lease (one that had a minimum of 21 years when it was granted) for a minimum of 2 years, the lease is a domestic lease, and the freeholder is not a charitable trust.
To begin the process of extending a lease, lease extension surveyors will need to conduct a professional lease extension valuation on your property before negotiating a lease extension agreement with your freeholder.
When Would I Need a Property Lease Extension?
We recommend extending the lease on your property before it reaches 80 years or less. After this, the value of your property tends to deplete alongside the lease, and it can be much harder to sell the property. What’s more, obtaining a mortgage on normal terms against a property with a short lease can be difficult.
A property lease extension reverses these factors, but the longer you wait to extend, the more it will cost you.
How Much Does a Lease Extension Survey Cost?
Property lease extension can be a costly process, but it is one of the best investments you can make on your property. At Crest Chartered Surveyors, our Lease Extension Surveys cost from £600.
However, you will encounter other costs when extending your lease, including the extension itself, but this can depend on a number of factors:
- The value of the property
- The number of years left on the lease
- Ground rent
- The value of any other internal improvements already made
It’s important to remember that the fewer years that are left on the lease, the more it is likely to cost to extend. We recommend property lease extensions are done sooner rather than later for this reason.
Why Choose Crest Chartered Surveyors?
As experienced chartered surveyors, Crest offers years of knowledge and experience across a range of surveys and valuations, but there’s more to us than that:
- 100% success rate on property lease extensions
- Low premiums on lease extensions
- All of our lease extension surveyors are members of the Royal Institution of Chartered Surveyors (RICS)
- We provide the quickest and most cost-effective solutions for your individual needs
Property lease extensions add 90 years onto whatever is left on your current lease. For example, if you have 70 years left on your lease, your extended lease will be 160 years.
Lease extensions can be a lengthy process, typically taking around 3 months to complete, although in more complex cases, or if the Leasehold Valuation Tribunal are involved, it can take up to 12 months.
In cases where the lease has significantly depleted, it can be difficult to obtain a mortgage. Different mortgage lenders will have different sets of criteria, however, on average, many lenders require there be at least 85 years remaining on the lease. Some may require a minimum length at the start of the mortgage, whilst others require a minimum length at the end of the term.
If you own a leasehold property, the freeholder literally owns the ground on which your property sits, and may charge you rent for use of this land, known as Ground Rent. The cost of Ground Rent is typically between £50-200 annually, and your freeholder cannot change the amount unless you agree to new terms, or it is stipulated in the lease. If you extend your lease, however, you should no longer be required to pay Ground Rent, as per the Leasehold Reform Act 1993.