Lease Extension (Extend your lease)

Lease Extension Surveyor

Property leases are a diminishing asset, losing their value as the remaining term decreases. While this may not affect the owner while they live in the property, it can result in a short supply of buyers when the time comes to sell up. Many house-hunters will factor the cost of extending a lease into their decision to purchase and it’s difficult to find lenders willing to finance a property with less than 70 years remaining.

The Leasehold Reform, Housing and Urban Development Act (1993) gives owners of a leasehold property the right to extend the term of their lease by 90 years, and reduce their annual ground rent to zero in exchange for a premium, paid to the freeholder. For a quick estimate of how much a lease extension will cost for your property, try using our Lease Extension Calculator.

In almost every instance of a leasehold extension, a negotiation between parties over an appropriate premium is required, which is where the expertise of a qualified surveyor is required. It’s also recommended that you obtain a professional leasehold valuation for the property in question. If you would like to learn more about the leasehold extension process, you can read our dedicated guide.

At Foundation Chartered Surveyors we work for tenants (leaseholders) wishing to apply for a leasehold extension and for landlords (freeholders) seeking assistance with a formal or informal counter-offer. We can also assist multiple leaseholders in the same building with collective enfranchisement.

lease extension & collective enfranchisement

Desktop Valuations

Desktop valuations provide a comprehensive report without requiring a full inspection of your property. All we will need from you is the date of your lease and its ground rent details. Our team can then gather the necessary information using specialist property portals.

Once completed, you will receive a report containing three different valuations: the likely settlement premium, the offer or counter-offer we anticipate your freeholder will make, and the figure we recommend when making an opening offer (either formally or informally).

Desktop valuations are recommended for properties valued up to £500,000 or if the leases generally exceed 80 years and local transactional evidence exists that can support the valuation. For properties located in Prime Central London or properties of higher value or properties with a shorter lease, we may recommend a full inspection valuation – contact us today to discuss your situation.

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Full Inspection Valuations

In some cases, a full inspection valuation may be more appropriate, particularly if your property is of higher value or benefits from being in Prime Central London. To complete this type of valuation, our team will undertake a comprehensive inspection of your home, to compile a report based on its Gross Internal Area, unusual features and its market value based on its unimproved state (improvements are to be disregarded according to the legislation).

Similar to the desktop valuation, the final report will contain three different valuations: the likely settlement premium, the offer or counter-offer we anticipate your freeholder will make, and the figure we recommend for an opening offer in either formal or informal negotiations.

We would recommend a full inspection valuation in cases where we’re acting on behalf of Freeholders who have to respond to a Notice of Claim, for properties of higher value, properties located in Prime Central London and for properties with short leases. If you would like to discuss your requirements, please don’t hesitate to call, email or send an enquiry via our contact us page.

Request your valuation


Leasehold Extension FAQs



Can anyone apply for a leasehold extension?

The 1993 legislation only covers those who have owned the property for at least two years (or are completing the process started by an eligible former owner), and in possession of a long lease – usually 21 years minimum from when it was originally granted. However, those that are not yet eligible may approach their freeholder for an informal agreement.


How is the lease extension premium calculated?

The premium is comprised of three parts; payment for the freeholders’ lost income from ground rent, compensation for their inability to resume possession of the property for an additional 90 years, and the ‘marriage value’ if the lease has fallen below 80 years.

‘Marriage value’ is 50% of the increase in property value granted by the longer lease, which, depending on how short the lease has become, can be a substantial amount. For this reason, it’s always advised that you extend a lease as soon as possible, and always well before the 80-year cut-off point.

 


Why do I need a surveyor to assist with a lease extension?

Lease extension is a complex process and a significant investment for most homeowners. Without a Chartered Surveyor with experience in lease extension valuations, you may find yourself paying an excessive premium or caught in a stalemate with your landlord. At Foundation Chartered Surveyors, we have extensive experience with a wide range of leasehold property, and can negotiate the fairest settlement between landlords and tenants.

 

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