Lease Extension Calculator London | Leasehold Extension
Would you like to extend your lease and calculate the premium?
By extending your lease, you could add a significant sum to your property’s value while securing an extra 90 years on your lease with no ground rent. However, extend your lease too early, and your costs could be higher than the increase in value. Extend too late, and your lease extension may be impossible to mortgage. Our leasehold extension calculator for London can help you decide whether now’s the right time to extend your lease. The approximate cost of extending your lease as well as learn more about factors that affect the total price, what to expect during this process and how a surveyor can help you. Please enter your details into the free calculator to find out how much the approximate costs for extending your lease will be.
Lease Extension Calculator Estimate | Prime Central London & Greater London
Leasehold Property Extension Advice
Maximising the financial benefit from extending your lease is all about timing. If you have less than 60 years remaining on your short lease, it may be virtually impossible to remortgage. If you have between 60 and 70 years remaining, there may be very little financial benefit to realise. You should consider extending your lease if you’re approaching the 80-year mark, but as each case is unique, it’s worth getting impartial advice from a qualified surveyor before taking action.
Lease Extension Valuation Quotation
Please remember that our calculator can only estimate the premium for a lease extension on your flat and doesn’t take into account the landlord’s fees for which you are liable. You’ll also pay a stamp duty if the lease extension costs over £125,000. Therefore, the figure provided by our calculator should only be used for initial consideration purposes.
You shouldn’t use our calculator as evidence in court, nor should you take any action regarding your lease extension until you’ve consulted a professional surveyor and/or solicitor.
When assessing lease extension values, evidence of similar flats in the same area is usually the main priority. This requires local knowledge and experience that is beyond the scope of our lease extension cost calculator. If you need advice from a trusted, experienced and local chartered surveyor, don’t hesitate to call us on 020 3598 6730.
How to Calculate the Lease Extension Cost
As you might expect, the size and location of your dwelling, lease terms and proposed length of extension have a significant effect on the total price of your lease extension. However, other fees that you should account for when determining the cost benefits of a lease extension include:
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Marriage Fees
Generally speaking, the longer you wait to extend your lease, the more expensive it will be. When your remaining term falls below 80 years, there could be a significant increase in costs due to the ‘marriage fee.’
Because the value of your property increases when the lease is extended, your landlord is entitled to half the value of the increase. This is what’s known as the marriage fee. If you want to avoid paying the marriage fee, you need to extend your lease before the remaining term reaches 80 years.
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Landlord’s fees for which you are liable
When calculating the total cost of your lease extension, you need to bear in mind the landlord’s fees for which you will be responsible. For example, you’ll most likely be liable to cover the costs of your landlord’s solicitor and surveyor fees, provided they’re ‘reasonable.’ We recommend adding approximately £2000 to the initial cost provided by our lease extension calculator to gauge an estimate of the total price you’ll need to pay.
If you think your landlord’s fees are unreasonable, you should talk to a licensed solicitor or chartered surveyor, who can tell you which steps to take to dispute the fees.
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Compensation
If your landlord’s interest in your property or any adjoining leaseholds reduces in value due to your lease extension, you’ll need to pay compensation. In most cases, given that your landlord will still own your freehold, you won’t be liable to pay compensation. However, loss of redevelopment potential could result in a claim. Again, we recommend consulting a qualified professional, such as a solicitor or surveyor, to find out whether you may need to pay compensation.
What are our rights as leaseholders to extend the lease?
As leaseholders, you have the legal right to extend your lease by 90 years, provided you have owned the property for at least two years, and the lease has not yet expired. This is governed by the Leasehold Reform, Housing and Urban Development Act 1993.
When to Serve Notice to the Freeholder?
To serve notice to the freeholder, you should engage a qualified solicitor specializing in leasehold reform. Ideally, you should serve notice well before your lease reaches 80 years, as the costs of extending your lease increase significantly once the lease term drops below this threshold.
Lease Extension Advice
Both you and your landlord must follow strict procedures and time frames when you wish to extend your lease, assuming you choose to negotiate formally. The procedures outlined under the Leasehold Reform, Housing and Urban Development Act 1993 exist to protect your legal rights, but you don’t need to follow the guidelines if you wish to enter informal negotiations, as discussed below. The following lease extension advice will help you understand the lease extension process, but we’re only a phone call away if you have any questions.
Is the Premium payable to the freeholder negotiable?
The premium payable to the freeholder is negotiable if you opt for a voluntary agreement. However, in a statutory lease extension, the premium is calculated based on complex factors, and a professional valuation from a chartered surveyor is required.
FAQs for Lease Extensions
Q: Why should you extend your lease?
Extending your lease is essential as the value of your property may decrease when the lease term gets shorter, making it harder to sell or remortgage. Additionally, a longer lease term provides more security and flexibility for the property owner.
Q: Am I eligible for a lease extension?
You are typically eligible for a lease extension if you have owned the property for at least two years and have a lease term of at least 21 years remaining.
Q: What am I entitled to during the procedure?
During the lease extension process, you are entitled to professional advice and support, fair negotiations, and transparent communication with the freeholder or their representatives.
Q: How much will it cost?
The cost of a lease extension depends on several factors, including the property's value, the remaining lease term, ground rent, and the extension's length. Additionally, legal and valuation fees will add to the overall cost.
Q: How do I get started?
To get started with a lease extension, consult a solicitor or leasehold expert, obtain a lease extension valuation, and serve a Section 42 notice on the freeholder, outlining your proposed terms for the extension.
Q: What is the procedure for extending the lease?
The procedure for extending a lease involves: a) Consulting a leasehold expert or solicitor b) Obtaining a lease extension valuation c) Serving a Section 42 notice on the freeholder d) Negotiating the terms and cost of the lease extension e) Finalizing the new lease agreement and registering it with the Land Registry
Q: Can a lease extension be refused?
A lease extension can be refused if you do not meet the eligibility criteria, serve an invalid Section 42 notice, or fail to agree on terms with the freeholder within the statutory negotiation period.
Q: How do I proceed with an absent freeholder?
If the freeholder is absent, you can apply to the First-tier Tribunal (Property Chamber) or Leasehold Valuation Tribunal for a Vesting Order, which grants you the right to extend the lease without the freeholder's involvement.
Q: What is the minimum lease extension?
The minimum statutory lease extension for a qualifying tenant is an additional 90 years added to the existing lease term, with the ground rent reduced to a peppercorn (effectively zero).
Q: What is an informal lease extension?
An informal lease extension is a private agreement between the leaseholder and the freeholder without following the statutory process. This approach may offer more flexibility but could also entail potential risks or unfavourable terms.
Q: What is a lease extension valuation?
A lease extension valuation is an assessment conducted by a qualified surveyor to estimate the cost of extending a lease, considering factors such as the property's value, the remaining lease term, and the ground rent.
Q: What is 'marriage value'?
A: Marriage value is the increase in the value of a property that occurs when a lease is extended. It is the difference between the value of the property with the existing lease and the value of the property with a longer lease.
Q: How long does a lease extension take?
A: The length of time it takes to extend a lease varies depending on the circumstances. Typically, the process takes between six and 12 months, but it can take longer if there are disputes or negotiations over the lease extension terms.
Q: What is the right to manage?
A: The right to manage is a legal right that allows leaseholders to take over the management of their building from the landlord. This means that the leaseholders can control the management of the building, including maintenance, repairs, and services.
Q: Can I get a 999 years lease extension?
A: Generally, a lease that has already been granted for 999 years cannot be extended. However, if the lease has less than 80 years remaining, the leaseholder may be able to extend it by 90 years under the Leasehold Reform, Housing and Urban Development Act 1993.
Q: How much will my lease extension premium be?
A: The premium for a lease extension depends on a range of factors, including the length of the remaining lease, the value of the property, and the terms of the lease extension. A professional lease extension valuation can provide an accurate estimate of the premium.
Q: Where can I get a professional lease extension valuation?
A: Harding Chartered Surveyors is a reputable and experienced firm that provides professional lease extension valuations. They have a team of qualified and experienced surveyors who can provide accurate and reliable valuations to help leaseholders negotiate fair lease extension terms.
Conclusion
In conclusion, extending your lease in London or the surrounding areas is a critical decision for any leasehold property owner, especially considering the potential impact on the value of the property and securing a mortgage. The lease extension process, governed by the Leasehold Reform, Housing and Urban Development Act 1993, provides a statutory framework for leasehold enfranchisement and the right to manage.
As a tenant, you are legally entitled to extend your lease by 90 years, as long as you have owned the property for at least two years, and your lease has not yet expired. The landlord cannot refuse a statutory lease extension, and the freeholder's rights are limited in this regard. However, bear in mind that the cost of extending your lease is subject to a complex calculation, which takes into account factors such as the annual ground rent, remaining lease term, and market value of the property. A professional valuation from a chartered surveyor is essential for determining the likely premium payable for the extension.
A free online lease extension calculator will give you a general estimate of the extension cost and provide a reasonably accurate guideline to the likely premium. However, it is crucial to seek professional advice and instruct a qualified solicitor specialising in leasehold reform to serve notice and handle the proceedings. Additionally, a valuation report from a chartered surveyor is necessary to ensure adherence to the statutory process.
If you prefer a voluntary agreement, you can approach your freeholder on a voluntary basis to negotiate the extension cost. It is essential to take into account the potential for costs to escalate and the need for a professional lease extension valuation. However, the freeholder cannot refuse a statutory lease extension, and any disputes can be resolved through the Leasehold Valuation Tribunal.
When looking to extend your lease, it is crucial to understand the potential costs involved and the impact on the value of your property. Obtaining a professional lease extension valuation and engaging the services of a solicitor with expertise in leasehold reform will help protect your interests and ensure a smooth lease extension process. Always seek professional advice before taking any action and be prepared for the financial implications of extending your lease.