Get free initial lease extension and enfranchisement advice
Call Holmes & Hills solicitors and speak to a specialist lease extension lawyer today. A specialist solicitor will give you free initial advice over the phone on how to go about extending your lease, how long the process can take, how much extending your lease might cost, your options and potential next steps. We will also answer any other questions you may have.
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Holmes & Hills is recognised as having a specialist team of lease extension solicitors and as such is on the national solicitors panel for ALEP (Association of Leasehold Enfranchisement Practitioners). ALEP is an organisation that provides leaseholders and freeholders with the confidence that their panel members have the expertise and experience to assist them in their leasehold property matters. Leasehold property matters are complex and a specialist area of law. ALEP strictly vet potential panel members to ensure they have the expertise, experience and necessary team of solicitors to properly advise, guide and represent clients.
Holmes & Hills Solicitors advise leaseholders across England and Wales on extending their residential lease or purchasing the freehold. Wherever you are in the county, we can advise, guide and represent you too.
By extending your lease, you are helping to safeguard the future value of your residential property.
In our opinion it is best to extend a lease whilst there is still 85-95 years remaining. Residential leases can still be extended if they are shorter than 85 years, but it becomes more expensive each year. Below 80 years remaining, it becomes significantly more expensive to extend a lease.
The value of a leasehold property decreases as the lease gets shorter, compared to a similar property that has a longer lease. Estate agents will also tell you that trying to sell a leasehold property with less than 90 years remaining is significantly more difficult than attempting to sell one that has more than 100 years remaining on the lease. This is due to the fact that it can be more difficult for purchasers to secure a mortgage against a property with a shorter lease, as well as the fact many purchasers, investors included, consider a shorter lease a risk. Where the property can be sold its value is likely to be diminished.
It will likely be more difficult to sell your property due to buyers being put-off by the shorter lease and the perceived risk that buying a property with a shorter lease entails. A shorter lease is also likely to be used by buyers a tool to negotiate down the sale price. If you are considering selling in the next few years, think about extending your lease first.
It can be more difficult to re-mortgage a leasehold property which has a shorter lease. Something to consider if you are thinking about re-mortgaging the property in the next few years. In this instance it is advisable to extend your lease first and many lenders might would require this.
Most flats and maisonettes in England and Wales are leasehold properties where the property is ‘leased’ to you, the leaseholder, by the landlord (the freeholder) for a fixed term, usually between 99 and 125 years. If the lease has not been extended, ownership of the property will eventually revert back to the freeholder once the lease comes to an end, leaving the leaseholder empty handed.
You are strongly advised to extend your lease before it falls below 80 years, at which point it becomes significantly more expensive to extend your lease. It is recommended you extend your lease whilst you have 85-95 years still remaining.
Under the 1993 Leasehold Reform Act, if a lease is renewed with less than 80 years remaining, the leaseholder must compensate the freeholder by paying an additional fee called a ‘marriage fee’, which is equal to 50% of the increase in value derived from the lease being extended. For example, if the value of a property increases by £20,000 due to the lease being extended (where the lease has less than 80 years remaining), the leaseholder must pay 50% of that increased value (i.e. £10,000) to the freeholder, in addition to other costs.
This additional ‘Marriage fee’ (£10,000 in this example) does not apply and is not payable if a lease is extended whilst still having more than 80 years remaining.
An added benefit of extending a lease under the 1993 Leasehold Reform Act (the statutory route) is the replacement of the ground rent with a ‘peppercorn rent’, this reduces the ground rent you pay for the remainder of the lease.
Qualifying leaseholders have a right to apply for a lease extension of 90 years under the 1993 Leasehold Reform Act. The process can commence by approaching the freeholder informally or more formally through the service of a Section 42 Notice. In either case it is recommended the approach is made through a lease extension solicitor as negotiations regarding values can become contentious and should the ‘Marriage’ value not be applicable, attempts may be made by the freeholder to delay or reject the application if it is not properly prepared.
If your lease is close to the 80 year threshold, it is strongly advised you involve a specialist lease extension solicitor who can progress the lease extension promptly, so that you avoid additional costs associated with the previously mentioned ‘marriage value’.
Collective Enfranchisement is a process where qualifying tenants within a block of flats can buy their freehold from their landlord. By purchasing the freehold of your flat with your joint leaseholders you can run and manage the property as you desire, instructing your own managing agents to deal with the day to day maintenance requirements on your behalf. Service Charges can be reduced, and you can insure the building as you desire without additional premiums or benefits being paid by you to your third party landlord for them to undertake this on your behalf.
The enfranchisement process is complex and essential that the statutory timeframes are strictly adhered to failing which, your claim could be deemed withdrawn. It is therefore essential that you obtain both specialist advice from both a specialist lawyer and surveyor to save errors occurring due to inexperience of your instructed advisors, costing you both money and delay.
If you are unable to reach an agreement with the freeholder after exhausting negotiations and the statutory procedure, you would need to apply to the First Tier Tribunal to decide the current premium. Our litigation department can assist with such applications.
It is possible to buy or sell a leasehold property with a short lease remaining. We recommend you talk to our lease extension specialist for expert impartial advice. Call us on 01206 593990 and ask to speak with Callie Tuplin. Callie will give you free initial advice.
Read our article ‘Buying or Selling a flat with a short lease?’ for more information on buying a property with a short lease.
At Holmes & Hills Solicitors, we provide specialist advice on all lease extension related issues such as:
In instructing Holmes & Hills' lease extension solicitors, you can be assured of clear cost effective advice, our leasehold specialists can: