With a trusted network of solicitors and surveyors, Regency Leasehold effectively manages and negotiates the best lease extension premiums possible.
Our team will ensure that your interests are protected, are duly represented, and that you are briefed about the key milestones and appropriate timescales of the process.
What is a Lease Extension?
A lease extension is a legal process during which a leaseholder extends the lease of their flat or maisonette to protect the value of their property.
One of the drawbacks of owning a flat or maisonette on a long lease is that it reduces in value over time. The less time is left on the lease, the less valuable the property becomes. Because of this, the law gives the leaseholder the right to extend their lease once they have owned it for two years.
The right is 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 60 years left to run, the newly extended lease would be for 150 years.
The landlord is entitled to a premium (the price) for extending the lease, and this is based on a formula set out in the Leasehold Reform Housing and Urban Development Act 1993, as amended by any future acts that apply.
How can a Lease Extension benefit you?
The number of years remaining on your lease has a significant influence over the value of your property and its marketability; the shorter the lease term, the more your property will drop in value.
Under UK law, if you have owned your flat for two or more years you can extend your lease whenever you deem necessary.
Extending your lease can be expensive if the lease is allowed to drop significantly. However, it is an essential process to maximise value and provides an opportunity to remove the ground rent element from the lease and/or rectify any lease clauses that may be detrimental to the value of the property.
What if you choose not to have a Lease Extension?
By delaying or not extending your lease, your lease extension will cost you more whilst simultaneously depreciating the value of your asset. In addition, the longer the lease is left below 80 years, the premium price of your prospective lease extension will increase exponentially.
Some premiums have been known to double or even treble after being delayed just 3-5 years. To be more specific:
Under 70 years.
Most mortgage lenders choose not to lend against properties with leases below this level or will offer much less favourable terms.
70 to 80 years.
Take action now as the cost of rectifying the problem is increasing exponentially.
Over 80 years.
If your lease is 85 years or below, you should begin to think about extending your lease now. Taking prompt action will avoid ‘marriage value’, whereby the freeholder is entitled to 50% of any uplift in value resulting from a lease extension or freehold purchase. To find out more about 'marriage values', check out our FAQ page.
What criteria do you have to meet to qualify for a Lease Extension?
Before you can extend your lease however, you must be a ‘qualifying leaseholder’.
To be a 'qualifying leaseholder', the following criteria must first be met:
The property must be held under a long lease (i.e. one which was granted for a term of 21 years or more).
The property must have been owned by you (the current leaseholder) for 2+ years.
This timescale begins from the date of registration at the Land Registry. If you wish to sell your property imminently, the ability to extend the lease can be transferred to the purchaser but the lease extension must first be initiated by you, the original lessee.
How much will your Lease Extension cost?
We promise that our fees for managing the lease extension process are all fixed and not subject to change.
Unlike many of our competitors, Regency Leasehold will provide you with a comprehensive breakdown of all the known costs right at the start of the process so you know what you're paying for.
Within just one month of your initial lease extension valuation survey, our experts will be able to calculate and provide you with an estimate of your lease extension premium. If the premium is higher than you expected and you can't afford to go ahead with your lease extension quite yet, you are not obligated to proceed.
To find out more about our flexible lease extension service, download our FREE Lease Extension Guide by clicking the link at the top of the page or by clicking here. Alternatively, if you would like to make an enquiry about our other services, please do not hesitate to contact us on 0208 462 6332 or email us at email@example.com to speak with a member of our team.