You could negotiate a lease extension, but you need to be aware of the risks. We recommend you get professional help from a solicitor and surveyor with experience in this area.
Leaseholders who own flats can either extend their leases under the law if they meet certain criteria (formal route), or by working out a deal with the freeholder (informal route).
The formal route will get you another 90 years added to your lease, and you will not have to pay ground rent, but the process takes time and there will be professional fees.
The informal route can be quicker, but it’s important to be careful. For example:
- You could be offered just a few years added to your lease, which means the lease will have to be extended again. This could affect the value of your flat, as a buyer will know that they will have to pay out for a lease extension in a few years’ time.
- The freeholder might want to change the lease, which might cause problems for you later. For example, the new lease might say that you must pay a fee if you want to rent out your flat or get a pet.
- The freeholder might ask you to pay a fee just to quote for a lease extension, which you would not get back, even if you decide not to go ahead.
You could agree with the freeholder to reduce the ground rent, but the ground rent cannot be increased. Also, no ground rent should be payable in the additional years.
For example, if your current lease has £500 a year ground rent, and 70 years left, you could negotiate a lease extension of another 40 years and a reduced ground rent of £50 per year. If that was done then you (or whoever owns the flat) would pay £50 a year for the next 70 years, then no ground rent at all for the next 40 years. It might seem strange to think about what happens in 70 years, but it will affect the future value of the flat.
More information you might find useful:
- Should I wait to extend my lease? I’ve heard that planned changes to the law could make lease extension cheaper.
- How can I extend my lease?
- Lease Extension – Getting Started
- Lease Extension Calculator for flats
- More Frequently Asked Questions on Lease Extension
Still not found the answer?
Contact LEASE to have your enquiry dealt with by one of our advisers