If you own a leasehold property such as a flat or apartment, then over the years as the time left on your lease decreases, you may need to consider extending it to protect the value of your property. Once the number of years left on a lease fall below a certain level, mortgage companies will not lend against it, meaning the property will be worth substantially less.

Different lenders have different thresholds, but you are generally advised to consider extending your lease once you have 90 years or less remaining and certainly before you reach 80 years remaining. Once your lease falls below 80 years remaining, the cost of extending it will noticeably increase as the landlord has the right to receive 50% of the increase in value of the property that will result from the lease extension. 

At Gibson Young Solicitors, we represent tenants and landlords in dealing with all aspects of residential lease extensions. We have an in-depth understanding of the complex law in this area and can advise you on the formal process to be followed and deal with any complications that may arise.

Our lease extension legal services include:

• Advice on extending a residential lease to include assessing eligibility

• Serving notice on your landlord

• Liaising with a professional valuer

• Calculating and negotiating cost of lease extension

• Completing your lease extension and registering with HM Land Registry 

• Lease extension with absentee landlord

• Collective enfranchisement or buying freehold

• Lease extension dispute resolution

• Expert representation at First-Tier Tribunal (Property Chamber)

If you would like to speak to one of our expert lease extension solicitors in London SW15 and W4, ring us on 020 7924 2919, email us at reception@gibsonyoungsolicitors.com or fill out our Contact Form.

The law relating to lease extensions can be complicated and it is important to follow the correct procedure from the start. We can serve notice on your landlord advising them of your wish to extend your lease via the formal statutory route, which affords you more rights and protections than an informal agreement might. We will work with an expert surveyor who understands leasehold extensions to obtain an accurate valuation of your lease and the increase in value.

We will explain the calculation process to you and agree on the formal offer to be made to your landlord. Following this, there is likely to be a period of negotiation over price which we will deal with on your behalf and in close consultation with you.

If agreement cannot be reached, we can make an application on your behalf to the relevant court, the First-Tier Tribunal (Property Chamber), although our solicitors are strong negotiators and are generally able to reach an agreement without the need for a court hearing.

Once an agreement has been reached, we will arrange for the necessary legal documentation to be drawn up and executed, for payment to be made to your landlord and for registration of the lease extension with HM Land Registry.

We also represent landlords in the lease extension process.

Under the Leasehold Reform, Housing and Urban Development Act 1993, most leasehold property owners have the right to extend their lease by 90 years for a flat or 50 years for a house at a nil rent, in return for payment of a premium, provided they satisfy certain eligibility criteria.

The qualifying criteria are as follows:

• You have owned the lease for at least the previous two years

• The lease is a long lease, for a term of at least 21 years

• The lease is residential, not commercial

• The property is not charitable housing trust accommodation

Calculating the amount payable is fairly complex. It is calculated with reference to the following:

• The value of the property

• The term remaining on the lease

• Ground rent

• The value of the property after the extension of the lease

The landlord will be compensated for the reduction in value of their interest in the leasehold property and will also receive a share of the increase in value.

To give you a very rough estimate of the amount that might be payable, you can use an online lease extension calculator, however you should be aware that this is for guidance purposes only and it is important to instruct an experienced surveyor to obtain an accurate valuation as a basis for negotiations.

You will also be required to pay associated costs, including legal fees, surveyor’s fees, the landlord’s reasonable legal fees and HM Land Registry’s registration fee.

We can advise you of our fees, which will be tailored to take into account your situation and the likely work involved in extending your lease. In most cases, an agreement can be reached between landlord and leaseholder without the need for protracted proceedings.

An alternative to extending the lease is buying the freehold of your property together with the other flat owners. This is referred to as collective enfranchisement. Once the leaseholders own the freehold between them, they can grant themselves leases of 999 years. In addition, they will no longer need to pay ground rent.

This may be harder to arrange, as it requires most of the leaseholders to work together to purchase the freehold, whereas you can deal with a lease extension as an individual.

You can follow an informal route if you wish, however you are advised to take legal advice before doing so as there can be some drawbacks. The deal your landlord might be offering might not necessarily be good value and they will also retain the right to increase ground rent, at least until the end of the original term.

There is also no guarantee that they will go through with the extension and you could end up finding they pull out several months down the line, leaving you out of pocket.

By using the formal route, you would be able to take the matter to a property tribunal if difficulties arose.

The government is proposing to pass new legislation giving the owners of leasehold flats and houses the right to extend their leases for up to 990 years, as opposed to the current allowance of 90 for flats and 50 years for houses.

An online calculator will also be put in place to try and reduce disputes over the premium payable to the landlord. 

Payment based on the increase in value of the property following extension, the so-called ‘marriage value’, will also be removed from the calculation.

This means that in some instances it may be a good idea to wait for the new law to be passed. We can discuss your individual situation with you and advise you on the best course of action in your circumstances.

At Gibson Young Solicitors in Putney and Chiswick, we offer both legal expertise and outstanding client service. We are friendly and approachable and our advice is clear and straightforward. 

If you would like to speak to an expert residential lease extension lawyer, ring us on 020 7924 2919, email us at reception@gibsonyoungsolicitors.com or fill out our Contact Form. All initial enquiries are free of charge and without any obligation.