London Lease Extension Surveyors

We are an independent firm of experienced RICS property valuers who provide probate property valuation services for residential and commercial properties and other assets throughout the South-East and North-West.

Lease Extension Explained

Extending a lease on a property can seem complex, and it is true that there are a number of steps to be followed. If you are in a position where you want to extend your lease, and you feel that you need the process of a lease extension explained, then read on to get your questions answered.

Do I Have The Right To Extend My Lease?

The answer to this will depend on whether you bought your flat more than two years ago. If you did, then the Freeholder of the building is legally obliged to extend your lease for an additional 90 years, on top of its current end date. The extension should have a peppercorn ground rent, but what needs to be agreed between the two parties, is just what this ground rent should be set.

How Do We Agree On The Ground Rent?

This comes down to negotiation between the two parties. Although there is a ‘statutory calculation’ on how the price should be set on a lease extension, this is subject to a number of variables. Usually the process involves an initial offer by you the Leaseholder and then a series of counter-offers, between you and the Freeholder, until a value is agreed.

How Do I Get A Figure For My Initial Offer?

To ensure that you are making an offer that is reasonable for both sides, it is a good idea to get a professional valuation carried out. MyLeasehold.co.uk offers such a service, providing you with a comprehensive two part-valuation that is tailored to your individual property.

The first part of the valuation will be the figure that you should initially put to your Freeholder. The second part is a valuation on what MyLeasehold.co.uk believes you will actually pay once the negotiations are complete.

How Do I Make the Initial Offer?

Once you obtain the two-part valuation figures you will be able to negotiate with confidence. There are two ways to make an offer to the freeholder.

Option 1

You can instruct a solicitor to serve a Section 42 Notice of Claim. This informs your Freeholder that you are claiming your right to a 90-year lease extension at a peppercorn ground rent. It also states the premium you are proposing. If you choose this route, it obligates the Freeholder to respond with a Counter Notice and they have a set period in which to do this.

Option 2

This option is the informal route, and it opens a dialogue between you and the Freeholder. Although there is an Act in place, freeholders and leaseholders are still permitted to come to whatever agreement they wish. The Leaseholder can make a written offer for what would essentially be the equivalent of a statutory lease extension, or they can propose different terms. A word of warning here however, any negotiation of this sort should only be taken with caution and professional advice.

How Do We Come To An Agreement?

If you selected Option 1 and went down the formal route, then your F reeholder will come back with a Counter Notice. If you chose Option 2 and entered into correspondence, then the counter-offer will be returned in that manner. Either way, negotiations are now under way.

If you do choose to use the service of MyLeashold.co.uk then you can draw upon their extensive experience in professional negotiation to reach the best outcome for you on your lease extension.

What Is The Final Step?

Once the negotiations are complete, and you and the Freeholder have reached an agreement on premium, the new contract can be drawn up between your solicitors and that of the Freeholder. If there are any additional agreements to be made on the contract term s, these will be hammered out at this final stage. Once the new lease has been signed by both parties the process is complete.