Would you like to reduce your annual ground rent payments to zero?
If you are a leaseholder and you’ve owned your property for two years or more there is a legal process that does just that.
Imagine what you could spend that money on instead.
Lease extension: your right
As a leaseholder, you have a legal right to ask your freeholder to extend your lease by 90 years. This process has the added benefit of reducing your ground rent to zero.
- you need to have owned your property for at least two years
- your home can’t be owned in a shared-ownership arrangement
- your lease had more than 21 years remaining when you bought it
As the name suggests, the lease extension process increases the length of your lease. As well as reducing your ground rent, your lease will be extended by 90 years. This means:
- you won’t have to worry about the lease again in your lifetime (leases only become a problem when they drop below 90 years in total)
- you’ll avoid the expensive process of extending a short lease later
- it’ll make your home easier to sell and increase its value
What does it cost?
The cost of extending your lease depends on a range of factors. How many years it has remaining, the value of the property and the ground rent you currently pay all influence the total.
It would be misleading to suggest that extending your lease is cheap. But as long as you negotiate a fair deal with your freeholder, it will be good value for money. Extending your lease is an investment and you’ll get the money back when you sell your property. By reducing your ground rent to zero you’ll save money every year.
The important thing to note is that the sooner you extend your lease, the cheaper the process will be. As leases drop below 90 years the cost begins to creep up. At 80 years it jumps again as you have to pay an additional fee to the freeholder. Taking action now will save you a big financial shock in the future.
Read our Leasehold 101 guide.
Get some help: how to extend your lease
To get a good deal on your lease extension and minimise any stress, you will need to find some professional help. Three areas where you’ll need support are:
- valuing your property
- negotiating a good price with your freeholder
- updating the legal records
It can also be really helpful to have someone manage the project and co-ordinate between these three areas.
At Homehold we can offer these services. But we also have a wealth of resources here on the site to help you better understand whether extending your lease is right for you, what the cost will be in your case, and how you want to approach it.