Tenants of leasehold property can extend their lease terms at any time, subject to qualification, by virtue of the Leasehold Reform Housing & Urban Development Act 1993. The Act sets out the qualifying criteria and the formula for valuing the price payable to the landlord for extending the lease term.
A lease extension can also be achieved outside of the Act by negotiation with the landlord.
Points to note in relation to lease extensions:
The price increases as the number of remaining years of the term decreases.
Prices for leases with less than 80 years of the term remaining will be significantly more expensive.
Mortgage lenders will insist that a lease has a certain number of years of the term still remaining. The actual number differs from lender to lender but 80 years is not uncommon.
Extending the lease term under the Act can be a lengthy process and is not always achievable in the timeframe of selling a flat.
Negotiating an extension with the landlord to coincide with the sale can be expensive as the landlord is in a strong bargaining position.
For further details please read the guide ‘Individual Right of Leaseholders’ or contact one of our team. You may also be interested in collective enfranchisement, and right to manage, and there is further information on these subjects in the guide Collective Right of Leaseholders
- Help Buying your First Home As property prices begin to rise, finding an affordable home can be a struggle, particularly if you are a first-time buyer. Jane Bohill, residential property lawyer at Warners Solicitors in Sevenoaks looks at some of the financial schemes available to help first-time buyers get their feet onto the first rung of the property ladder...
- Deciding to be Joint Tenants or Tenants in Common? If you are buying a house, choosing whether to be joint tenants or tenants in common is a key decision. we look at the advantages, disadvantages and key considerations...
- Warners Solicitors secures Law Society's new quality mark Warners Solicitors has secured membership to the Law Society's Conveyancing Quality Scheme - the mark of excellence for the home buying process. Warners Solicitors underwent rigorous assessment by the Law Society in order to secure CQS status...