Under the law the owner of a leasehold house, may be entitled to a lease extension of 50 years. There is no premium payable for a lease extension of a house in this case.
However, the ground rent throughout the 50 year extension of the extended lease, may increase to a modern ground rent. This modern ground rent would be assessed on the first day of the new lease and shall represent the letting value of the site.
A modern ground rent is usually much higher than the existing ground rent. Advice should be sought by how much the new ground rent may increase prior to proceeding with the extension.
Buying the freehold can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.
More information you might find useful:
- Houses – Qualification and Valuation
- More Frequently Asked Questions on Houses – Enfranchisement and Lease Extension
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