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Extending your Lease
Residential property leases are long term but if you have 80 years or less left on a lease on a property you own, or are looking to buy, then a lease extension is strongly advised.
A lease extension is a continuation of the lease agreement beyond the original term. Most residential flat owners have the right to extend their leases for a number of years provided they have met the criteria.
The shorter the lease is, the more expensive it will be to extend. If your lease is approaching 80 years then you should consider a lease extension. As soon as the lease term is below 80 years, then it immediately becomes more expensive due to the way the price of the extension is calculated. Many mortgage lenders will not be prepared to lend on leases that have 70 years or less remaining and virtually no lender will mortgage a property with a lease of less than 60 years.
We will need to check your eligibility in order to be able to extend your lease. To be a qualifying leaseholder you must have owned the property for at least two years. The property must be residential and the original lease needs to have been granted for a term of years in excess of 21 years.
There are two different options for extending your lease:
- Many landlords are willing to discuss the terms for a lease extension without the need to serve a formal notice. This can be a more beneficial approach as it can lead to more favourable terms and can be quicker. This route can also be used if you have owned the property for less than 2 years.
- If you decide to go down the formal route the procedure is started by the service of the Tenant’s Notice which is sent to your landlord. You will need to instruct a solicitor who will start the process by serving that notice, which will offer a premium for the Lease Extension. There are strict time limits set out in law so it is essential you consult an expert lease extensions lawyer before starting the procedure.
We always recommend that you consult a Chartered Surveyor at an early stage to provide you with advice on the correct value for the premium to extend the lease. This will also place you in a stronger position to negotiate as you have professional valuation advice.
If you wish to start the process of extending your lease or just have a general discussion about you options then call our New Enquiries team on 0800 0271452 to arrange a no obligation discussion with one of our lease experts.