Lease extension for leasehold houses

If you meet the qualifying criteria, you have the right to either extend your lease or buy the freehold of your house, which is known as enfranchisement.

You have the right to get 50 years added to the length of your lease. Your ground rent becomes a modern ground rent, which is calculated using a formula set in legislation.

The extension terms for houses are less favourable than the extension terms for flats (extending the lease of a flat adds 90 years and reduces ground rent to zero). Therefore, some leaseholders of houses choose to buy the freehold (enfranchisement) instead of extending the lease.

If you qualify for full enfranchisement instead, buying the freehold may offer better long-term value.

You generally qualify if you hold a long lease of the house and it is your home. A long lease normally means a lease originally granted for more than 21 years.

You may not qualify if:

• the property is a business premises
• the landlord is a charitable housing trust and the property is provided for charitable purposes
• the lease terms do not meet the statutory definition.

The statutory definition of a qualifying house in the 1967 Act is:

• it can reasonably be described as a house – including terrace, semi-detached, or detached properties, even if they are divided vertically
• it was designed or adapted for people to live in
• the lease covers the whole house, not just part of it
• where a building is divided horizontally, the flats into which it is divided are not separate “houses”, though the building as a whole may be
• the lease meets the low rent requirements set out in the Act

If the building is a mix of business and residential use, or a house converted into multiple units, you may need specialist advice.

There is no premium (price) to pay for extending the lease of a house by 50 years through the formal legal route.

However, the lease extension does not reduce ground rent to zero. Instead, it converts to a “modern ground rent” for the additional 50 years after the original term ends.

A modern ground rent is based on the letting value of the land and other measures. It will usually be more expensive than the previous ground rent. It can be reviewed after 25 years.

You will have to pay your own legal and valuation costs, and your landlord's reasonable costs.

You start by serving the correct statutory notice under the 1967 Act on your landlord, setting out your claim.

Provided that you qualify, the landlord must then grant a new lease that’s 50 years longer, with the same terms as the original lease.

If you cannot agree on the terms, you or the landlord may apply to a tribunal for a determination: the First-tier Tribunal (Property Chamber) in England, or the Leasehold Valuation Tribunal in Wales. Find out more about applying to the Tribunal.

Mortgage lenders will normally consent to the lease extension but your solicitor must arrange documentation with your lender.

House extensions must be done separately. They cannot be combined with collective claims made by flat owners.