If you own a leasehold house you are likely to be able to extend your lease – however there are various advantages to buying the freehold as you will see from the answers to the following frequently asked questions.
Am I eligible for lease extension on my house?
The chances are that you will be eligible for lease extension – however there is a chance that you won’t be. All leaseholders must have owned the house for at least 2 years and those who have owned the house for less than 2 years will not be eligible. Your eligibility may also be affected if you already have a business lease, if the original lease was for less than 21 years, or if you have sublet a property with a lease under 21 years. You should also know that you can only extend your lease once and this must be done before the lease ends. Therefore, if you have extended your lease before, or your lease has run down you may not be able to get an extension.
Different rules apply to house lease extension and flat/apartment lease extensions. Flat leases can be extended for up to 90 years whereas house leases require 2-year ownership and can only be extended to 50 years.
Are prospective buyers put off by short leases?
A house with a lease below 70 years is likely to be difficult to sell. Potentials buyers will usually struggle to get a mortgage if the lease is short and they are often reluctant to wait 2 years before they can extend the lease. It is therefore in your interests to extend the lease – it will add value to your property. Make sure you apply to extend your lease before it runs out though because otherwise you will lose the right to your lease extension entirely.
I don’t know who my freeholder is? How do I find out?
If you are unaware who your freeholder is you should ask the Land Registry to find out for you.
How do I go about extending the lease on my house?
You have two options for your lease extension.
- Either you attempt to do this informally by making contact with your freeholder and negotiating a price, or
- You make a formal statutory request for lease extension which involves a strict procedure. You will need to pay the legal fees of both you and the freeholder as well as valuation fees involved.
Is it best to buy the freehold of my house instead?
Very often buying the freehold of your house is a good idea because it rules out the need for house owners to pay service charges or ground rent.
Buying the freehold is also likely to increase the value of your home and allows you to make repairs without consent. Buying the freehold can be expensive though, and not all leaseholders will be able to do it.
What will extending the lease on my house cost?
The cost of lease extensions vary depending on the property and the length of the lease. When it comes to house leases, you do not need to pay a fee to the freeholder like you do with flat lease extensions. You will have to cover the freeholder’s legal fees as well as your own. This can add up but it is still usually cheaper than purchasing the freehold.
Will my ground rent arrangements change?
Ground rent will usually go up following a lease extension and will come into effect once the current lease expires. The new amount will be based on the property value at the time of the extension and can go up again after 25 years. If an agreement over the rent payments cannot be reached a Leasehold Valuation Tribunal (LVT) may be needed to fix an amount.
My lease has ended – what now?
Once your lease runs down, you technically cease to be the house owner and instead become an assured tenant paying rent to the freeholder who in effectively becomes your landlord. In this situation you will still have rights as an assured tenant but these will not be as extensive as the rights of a leaseholder.
You may find that you are capable of negotiating informally with the freeholder to extend your lease however they will be under no obligation to grant the extension or even negotiate. You therefore need to get legal advice as soon as possible because if your lease runs down you may lose your financial stake.
Extending the lease on my house – Do I need a specialist solicitor?
That’s a really easy question – the answer is yes. You need to appreciate that very few conveyancing or property solicitors come across lease extension more than once in a blue moon – and sadly, in our experience, many solicitors with little experience of lease extension work, struggle to do a good job for their clients when it comes to extending a lease. When you add in the fact that leasehold houses are relatively unusual these days [though I was surprised to find when researching for this blog, that there are estimated to still be around 200,000 houses in England and Wales which are owned under a long leasehold, though many of these are very expensive properties based in central London] – and far less common than leasehold flats, you understand why when looking to arrange a lease extension on your house, whether it’s your home or the property is rented out, you really do need a solicitor who knows what they’re doing.
Our lease extension team do nothing but lease extension and enfranchisement work – so you can rely on them to provide you with the advice you need.
Thinking of extending the lease on a house? We can help
Our lease enfranchisement and lease extension solicitors can help house owners with lease extensions of leasehold enfranchisement. So, if you are a house owner looking for expert legal advice:
- Call us now us free on FREEPHONE 0800 1404544, or
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