At Peter Barry, our experienced lease extension surveyors work with both Leaseholders and Freeholders, guiding them through the complex process of lease extension in London.
If you own a leasehold property, you may already be aware that as your lease gets shorter, its value decreases. While this may not pose a problem while living in your home, a short lease can be problematic when the time comes to sell. Buyers are wary of shorter leases, and a number of banks will not lend against leases under 85 years.
The Leasehold Reform Act (1993) gives flat owners the right to extend their lease by 90 years, and a reduction of their ground rent to “a peppercorn” (zero). We have saved clients thousands of pounds, negotiating on their behalf including representation at Tribunal.
To qualify formally the Leaseholder must;
There are a few exceptions, which include commercial or business leases, and if the property is provided as part of a charitable housing trust.
The formal process begins when the Leaseholder serves a S42 notice on the Freeholder. This notice includes a proposed premium, so it’s important to obtain a valuation beforehand. Too low a figure can invalidate the notice, but too high will compromise negotiations.
The freeholder will typically serve a counter-notice requesting a higher sum and the two parties then enter into negotiations to agree a settlement.
If a settlement cannot be reached the Leaseholder can make an application to the First Tier Tribunal. The vast majority are settled without going as it encourages both sides to avoid the associated costs. Only around 1% of cases end up being heard.
The process typically takes 6 – 9 months but can be agreed in a shorted time, particularly if the lease is over 80 years. The client will need to also instruct a solicitor to deal with the notice, handle timings and agree & register the new lease at the Land Registy.
The premium has two parts; the reduction in the value of the freeholder’s interest and, where the lease is shorter than 80 years, 50% of ‘marriage value’.
The first part comprises compensation for the freeholder’s lost ground rent, and for the deferring their ability to reclaim the property by another 90 years. The second part, ‘marriage value’, is the increase in the combined value of the freeholder’s and leaseholder’s interests arising from the lease extension.Try Our Lease Extension Calculator
The more time you have left on your lease the less it will cost to extend it, so it’s always best to act early. As marriage value can be a significant portion of the premium, it’s advisable to submit a lease extension claim well in advance of the 80-year cut off point.
Your surveyor is responsible for producing a valuation report indicating how much the lease extension will cost, allowing you to make an informed decision about how to proceed.
Each case will have a number of variables which tend to be debated between valuers, so appointing a surveyor that you trust to negotiate on your behalf is essential. Our surveyors have knowledge of local property values, valuation techniques, and the latest case law to ensure you get the best possible deal.
We handle hundreds of lease extensions in London every year. Virtually all of our cases are settled by negotiation, but we are also familiar acting as an expert witness at Tribunal if required. Our clients include individuals, investors and large property firms, and we pride ourselves on delivering reliable, straightforward advice and a high standard of representation in every case.
For in depth advice and a quotation.
Book one of our Chartered Surveyors to undertake your survey.
One of our Valuers will be in charge of your case and analyse the market.
You will receive your report within 4/5 working days.
Our surveyors will be more than happy to address any concerns or queries.
We are in your corner to get you the best possible outcome in your lease extension claim. We can provide a full service, including valuation, negotations and expert evidence, with step by step advice throughout.
Our team Chartered Surveyors includes Registered Valuer’s who undertake leasehold reform work on a nearly exclusive basis. Our Surveyors deal with hundres of cases every year, have experience of acting as expert witness at Tribunal hearings and are dedicated to getting you the best outcome possible.
Our experience in this area facilitates efficiency, allowing us to provide a first class service without the first class price tag.