At AQ Archers, we have helped many leaseholders to extend/renew their lease. It is essential that you renew before your lease reaches 80 years remaining in order to avoid paying the marriage value to the freeholder. We have assisted many UK leaseholders to negotiate the best possible terms of their lease extension, and hence remove any worry from their shoulders.
What is the difference between leasehold and freehold property?
Freehold means both building and land is owned; this is the most common model of ownership in the UK. Freeholders are responsible for the property they own, including matters such as maintenance, noise, and boundary disputes.
Leaseholders, on the other hand, do not own the land on which their property resides. Lease periods vary, and maybe as short as 40 years, or up to 999 years. Leases can be extended once expired or the property returned to the landlord. The landlord is ultimately responsible for the land on which your property is located, but the costs for management are typically shared by payment of a service charge.
How can I extend my lease?
If you are a leaseholder, it is important not to allow the lease period to drop too low, or you risk losing the value in your property. You do not need to wait until your lease is expired or nearly expired to extend it, in fact, this would be highly discouraged. The commonly accepted point at which you need to take action is around 83 years because at 80 years remaining, landlords are entitled to receive 50% of the ‘marriage value’ (the added amount of property value created by extending the lease) in addition to the price of the lease extension.
For leasehold flats, you may be able to extend your lease by 90 years, and for houses, 50 years under the 1993 Leasehold Reform Act, subject to meeting the legal requirements. Specifically, this means you must have owned the property for at least two years.
The landlord is entitled to a fair market price in return for extending the lease.
How much will it cost to extend my lease?
The cost of the extension will depend on the value of the property, the remaining lease length and of the extension itself. For example, to extend the lease on a flat with a value of £200,000 by 90 years, would be £14,000 (extension cost) + £2,500 (approximate professional fees) if the existing lease length remaining is 70 years; but if this same extension had occurred when the lease had 85 years to run, the cost would be £6,000 + £2,500.
The message is therefore clear; if you are a leaseholder, take control of the extension process yourself when the lease period remaining is getting close to 83 years – you will preserve the value of your investment and save a great deal of money in fees.
Why use AQ Archers to manage your leasehold renewal?
Being based in London, where many buildings are lease owned, we have considerable experience of the legal practicalities of leasehold extension/renewal.
Our team understands the urgency involved if your lease is close to 83 years remaining and will act to ensure your interests are protected, ensuring your application is successful, and any challenges or objections are overcome. We are well versed in the process and can negotiate on your behalf with the current freeholder.
AQ Archers, based in London, can assist you with all aspects of obtaining ILR based on long residence for you and your family. To speak to one of our consultants, please call 020 8521 2605.