Why would I need to extend my lease?
All current leases usually have a term of either 99 or 125 years. If the lease term falls under 80 years this may impact the value of the property. You may also find it more difficult to sell and secure a mortgage.
Why are 80 years so important?
The premium that a leaseholder pays to a freeholder for the privilege of extending the lease follows a set formula. This formula changes the moment the lease term drops below 80 years, as at that point the formula then adds 'marriage-value' to the total cost.
What are my options?
There are two routes you can explore to extend the lease, you can either follow the statutory route or Hightown will allow leaseholders and shared owners to extend the lease using a voluntary route.
Am I eligible?
Everyone is eligible for the voluntary route but to qualify for the statutory route you will need to be a leaseholder and have owned the property for two years or more with more than 21 years remaining on the original lease.
What are the main differences between the voluntary and mandatory routes?
Under the statutory route, the leaseholder can serve a Section 42 notice on the freeholder. The freeholder has up to 2 months to provide a response. If the proposed premium cannot be agreed by both parties the leaseholder can apply to the First-Tier Tribunal (Property Chamber) for a determination.
Shared owners can only extend their lease by using the voluntary route. Hightown will confirm the cost to extend the lease and although there is no right of appeal because of the reduced administrative requirements this route can offer better value for money.
What are the associated costs?
The current valuation fee is £600, which is payable upfront. There are also administrative fees and solicitor fees (approximately £1500). The lease extension premium is not included as part of these fees, the premium will be confirmed once a formal valuation has been carried out.
If I extend the lease how many years will I get?
In most cases, you will get an extra 90 years, which is then added to the existing remaining term.
Where can I find a Lease Extension Calculator?
Please follow the link below, this is only able to provide you with a rough estimate and is not always accurate.
If you have any further queries or would like to arrange a valuation please contact the Home Ownership Team:
By emailing home.ownership@hightownha.org.uk or call us on 01442 292535.
