Jackie Scott Ltd will be delighted to assist you with the your lease extension.
It comes as no secret that the fewer the years remaining on a lease, the less valuable it becomes. It is therefore wise to consider extending a Lease when the remaining lease term is around 80 years. It is also sensible to remember that short leases are not acceptable to mortgage lenders and you may therefore experience difficulties when you come to sell your property or need to remortgage.
There are two ways in which you can apply to the Freeholder to extend the Lease:
The first is a more relaxed route whereby you approach the Freeholder to request a lease extension and enter informal discussions. Whilst this may be considered the quickest route, the Freeholder may also want other negotiations such as an increase on ground rent, offering a lower amount of years for the required premium and to request other amendments to the Lease.
The second route is to follow the statutory approach and serve a formal Notice on the Freeholder under the Leasehold Reform Housing and Urban Development Act 1993. To use this approach, you must be a ‘qualified tenant’ and have owned your property for at least two years. The Freeholder will still be entitled to a premium which will have to be negotiated but the ground rent will be reduced to a peppercorn and you will receive an additional 90 years on top of the remaining lease term.
The calculations for the premium are complex and depend on the value of the property, the number of years left on the lease, the annual ground rent, the value of improvements done to the property paid by the leaseholder and external factors such as expected rate of returns on investments. Whilst it is is a complex calculation, it is also a subjective one. There is not necessarily a “right” answer to the value of lease extension, which means it will be subject to negotiation and you should instruct a suitably qualified Surveyor to assist you with the negotiation process.
Our fees for Lease Extensions start at £500 plus VAT for a simple voluntary Lease Extension that has been agreed by all parties. If you require a Lease Extension via the Statutory Route our fees start at £750 plus VAT. A Land Registry Fee will also be payable to register the document with Land Registry.
Please contact us today on 01243 823090 for a no obligation, fixed fee quote.