Is the lease on your property nearing 80 years?
If so, you need to take action now.
Every leaseholder who has owned their home for two years or more has the legal right to extend their lease. But if the lease drops below 80 years – even by a day – you face having to pay an additional charge to your Freeholder.
This fee can run to thousands.
Take action now: extend your lease
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.
If your lease is nearing 80 years you need to take action now. The lease extension process typically takes around a year to complete and you don’t want to slip the wrong side of the 80-year mark.
To qualify for a lease extension:
- 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 well as dodging the extra fees that come after 80 years, extending your lease has lots of advantages. Extending your lease will:
- reduce your annual ground rent to zero
- make your property more valuable
- make your home more attractive to prospective buyers
- mean you won’t have to worry about your lease again in your lifetime. And you’ll hand a much more valuable asset on to your children.
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.