Property Conveyancing
Lease extension solicitors – expert advice
Maximise the value of your property by extending your lease. By acting early, you can save money and significantly increase the value of your home.
110+
years of service
30
experienced partners
200+
advisers and growing
Increase the value of your home with a lease extension
What is a lease extension and how does it work?
When you own a leasehold property, its value can depreciate over time. Once your lease has gone below 90 years, it’s likely the asking price of your property will fall. Once it has gone below 80 years, few mortgage lenders will lend against your property, limiting the purchase to cash buyers only.
A lease extension is a legal right for property owners to extend the period of their lease. For flats this is an addition of 90 years to the remaining term and for houses, 50 years. It also has the advantage of setting the ground rent to zero, or “a peppercorn rent”.
"Very informative all the time, clear instructions and a very fast result. A pleasure to work with. Highly recommend."
The importance of taking action on lease extensions
There are several reasons why it’s important to take action on extending your lease:
- as the lease gets shorter, your property loses value.
- the lease extension process can be lengthy, and delay could impact the value of your home and make lease extension more expensive.
- if your lease falls below 80 years, you’ll be charged a “marriage value” for extending. This is a penalty fee paid to the freeholder, amounting to 50% of the increase in the property value. With an 81 year lease the marriage value is 0%.
- for leases of 80 years or less, the property becomes harder to sell because mortgage lenders won’t lend against it.
How to qualify for statutory lease extension
Previously, leaseholders would have to wait two years before qualifying for a statutory lease extension, which is no longer the case. You can now start the extension process as soon as you are the registered owner of the property. There are other conditions, however:
- your lease must have been granted for a term of more than 21 years
- you don’t qualify if the landlord is a charitable housing trust
- you generally don’t qualify if you bought your home through a shared ownership scheme and you have not achieved 100% ownership
- business or commercial leases do not qualify
Voluntary lease extension
If you don’t want to go down the statutory route, then you can extend the lease through an informal negotiation with the freeholder. The advantage is that this process can be quicker, but the freeholder does not have to agree, and you don’t have the legal backing of statutory time limits and fair-pricing tribunals.
How much does a lease extension cost?
Costs vary and should be checked with your professional adviser before you proceed. This could amount to £20,000. However, these costs should be covered by the increase in the value of your property. The costs you have to cover include:
- the premium – this is the amount paid to the freeholder based on the value of the property and the length of the lease
- your solicitor’s and surveyor’s/valuer’s fees
- the freeholder’s legal and valuation fees (which you are obliged to cover under law)
- land registry and administrations fees
Get expert legal advice
Extending your lease can be a complex and expensive process, but it will significantly increase the value of your home. Whether you decide to go for statutory or informal lease extension, it’s important to have a knowledgeable legal adviser on your side to take you through the whole process. The legal experts in our property team have years of experience in lease extension and will ensure your legal rights are protected and that you don’t pay too much. They will also take care of registration and other formalities. We will keep you informed at all times and overcome any issues that arise.
Supporting you through the lease extension process
Our property team will help you with the following:
- advice on the timing of when you should get your lease extension process underway
- estimated cost of lease extension
- guide you through the process from start to finish
- financial advice on loans, mortgages and investments
Legal and financial advice under one roof
Tees is a top-tier Legal 500 firm offering joined-up legal and financial services. We have our own independent financial advisers (IFAs), who work closely with our lawyers.
Our advisers provide holistic financial planning, and as we are not connected to any one provider, we can offer a whole-of-market approach for the range of products we can advise on. We can also give independent advice for a whole range of insurance products to protect you and your family. Our IFAs are regulated and authorised by the Financial Conduct Authority, which means we’re accountable for the advice we give.
Get in touch today, we’re here to help
Our clients range from high-net-worth individuals with complex finances to those with more straightforward needs. We also specialise in the agricultural sector, having a sound understanding of the relationship between business and personal needs.
We have offices across Cambridgeshire, Essex and Hertfordshire, but we can help you wherever you are in England and Wales.
Key people
Get in touch
Please complete this form and one of our team will be in touch with you shortly.
Alternatively, you can call us now.
Phone
Send us an enquiry
Fill in the form below and one of our team will get back to you.
By submitting this form, you agree to our privacy policy and consent to being contacted about your enquiry. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
What our clients say
★★★★★
“I have just used Marie Rodger’s for conveyancing and found her and the team to be excellent they kept me in the loop 100% and completed the sale with Sympathy and expertise. Thank you Marie and your team, I will recommend you.”
Moira
Property conveyancing
★★★★★
“We received an excellent conveyancing service with everything prompt and efficiently done on reasonable terms. Fee options (fixed or estimated) were clearly explained by Tees at the outset. We’d have absolutely no hesitation in recommending Tees for a property sale or purchase with particular mention to Kitsten”
Gary Shaw
Property conveyancing
★★★★★
“As a first-time buyer, the process of purchasing my home was full of ups and downs… but having Tees Law by my side made all the difference. I couldn’t have asked for better support. I would highly recommend Tees for anyone looking for a reliable and dedicated residential lawyer!”
Hannah Augood-Rason
Property conveyancing
Featured insights
Tree roots and overhanging branches: what are your rights?
Unfortunately, disputes between neighbours over trees often arise. Whilst trees can enhance the appearance of a property, they can also
What are the differences between ground rent and service charge and why does it matter?
Buying a leasehold property comes with financial obligations that freeholders rarely have and two of the most misunderstood are ground
Buying and selling unregistered property in England and Wales
The Land Registry was formed in 1862, but the registration of land and property was initially voluntary. The Land Registration
Buying a property in Cambridge, things you may not know
If you’re thinking about buying a property in Cambridge, it’s important to get to know the local area. Although the
Lease extension FAQs
How do I extend the lease on my property?
There are two main routes to extending a residential lease: the statutory process or an informal agreement with the freeholder. The statutory process gives qualifying leaseholders a legal right to request a lease extension, subject to certain conditions and procedures.
A specialist solicitor can advise on your eligibility, review your existing lease, guide you through the process and deal with the legal documentation needed to complete the extension.
How much does it cost to extend a lease?
The cost of a lease extension depends on a number of factors, including the property’s value, the length of the existing lease, the ground rent and the terms of the lease.
You will usually need to budget for the premium payable to the freeholder, as well as your own legal and valuation fees. You may also have to contribute towards certain reasonable costs incurred by the freeholder including their legal and valuation fees.
A specialist lease extension solicitor can work with a qualified valuer to help you understand the likely costs before you proceed.
How long does a lease extension take?
The timescale will depend on whether you use the statutory or informal route and how quickly the parties can agree the terms.
A statutory lease extension can take several months, particularly where the premium or other terms are negotiated or disputed. It is therefore important to start the process well before you need the extended lease, particularly if you are planning to sell or remortgage your property.
When should I extend my lease?
It is generally sensible to consider extending your lease before it becomes short.
The length of your lease can affect the property’s value and ability to secure a mortgage, and extending a lease can become more expensive as the remaining term reduces.
The position around marriage value is also important for certain statutory lease extensions where the lease has fallen below the relevant threshold. Getting advice early can help you understand your options and avoid unnecessary delays or costs.
Do I qualify for a statutory lease extension?
Eligibility depends on the type of property you own and your individual circumstances. The statutory rights and qualifying requirements for flats and houses are different.
Recent changes to leasehold law are also affecting the statutory lease extension regime, including reforms intended to make lease extensions longer and the process simpler.
A solicitor can review your circumstances and confirm which lease extension options are available to you.
What is the difference between a statutory and informal lease extension?
A statutory lease extension follows a legal procedure and, where the qualifying requirements are met, gives the leaseholder certain statutory rights and protections.
An informal lease extension is negotiated directly with the freeholder. The terms are therefore a matter of agreement between the parties and may differ from the statutory terms.
An informal extension can sometimes be quicker or more flexible, but it can also involve terms that are less favourable to the leaseholder. It is important to take legal advice before agreeing to an informal lease extension.
What is marriage value on a lease extension?
Marriage value is a concept used in calculating the premium for certain statutory lease extensions.
Broadly, it reflects an increase in the combined value of the freehold and leasehold interests following the lease extension. Where applicable, marriage value can significantly affect the premium payable.
The rules around marriage value are changing as leasehold reform legislation comes into effect, so the position should be considered carefully based on the specific property and timing of the lease extension.
Can I extend my lease when I am selling my property?
Yes, but the best approach will depend on your circumstances.
If you are selling a property with a short lease, you may be able to extend the lease before the sale. Alternatively, depending on the circumstances and the applicable legislation, there may be options for dealing with the lease extension alongside the sale.
A short lease can make a property more difficult to sell or mortgage, so it is worth taking legal advice as early as possible if you are planning to sell.
Can I extend my lease if I have a mortgage?
Yes. However, your mortgage lender’s interests will need to be considered as part of the lease extension process.
The lender may need to consent to or be notified of the lease extension, and the extended lease will need to meet its requirements.
Your solicitor can liaise with your lender and ensure the necessary legal steps are dealt with as part of the lease extension.
You might also need
Remortgaging your home
Remortgaging your home can give you the flexibility to find a better mortgage rate, spend money on home improvements or consolidate your finances.
Shared ownership
Shared ownership can be a great way to get onto the property ladder if you’re not able to buy a home outright.
Declaration of Trust
If you own a share in a house, a declaration of trust is a document that says how much you’ll get when it’s sold.
Transfer of Property Ownership
A transfer of equity is the legal process to change the ownership of a property by adding or removing one or more people to the legal register.
