Leasehold extensions

If you own a leasehold flat in London you will want to keep an eye on the amount of time left on the lease because short lease terms, those below 80 years, can affect the value of the property as well as a potential buyer’s ability to secure a mortgage.

The 1993 Leasehold Reform Act allows most leaseholders to extend their leases by up to 90 years, to potentially improve the value of the property. There are some conditions:

• You must have owned the property for at least two years
• There must have been at least 21 years on the original lease

What is the process?

A leasehold on a residential property can be extended at any time, whether the property is for sale or not. If you’re the homeowner and want to extend the lease and still live in the property the process is straightforward. You will need to instruct a local surveyor who will value your London property. This value will be used to calculate the cost of extending the lease and then serve Notice on the freeholder.

Extending the lease during the sale

In order to maximise the sale price of a property many leasehold extensions are carried out during the sale process. As a vendor of a London property you will follow the same process highlighted above.

Between the exchange and completion stages of the purchase your solicitor will inform the landlord of the wish to extend the lease and offer a price for doing so. This means that the buyer can take over the leasehold extension application, rather than having to wait two years before they are entitled to begin the process themselves.

Buyers meanwhile should also seek independent advice so that they are in a strong position to renegotiate the agreed purchase price.

How we can help

KFH Chartered Surveyors can provide London property owners, vendors and buyers with a valuation for a leasehold extension application. You can find out more about leasehold extensions from KFH Chartered Surveyors by calling 0800 328 8898 or contact us by email.