Intro
If you own a leasehold property, you may need to extend your lease or even buy the freehold at some point. As a lease gets shorter, it can become more expensive to extend and may impact your property’s value and mortgage options.
A lease extension allows you to add years to your existing lease, securing your long-term rights to the property. Leasehold enfranchisement, on the other hand, gives leaseholders the opportunity to buy the freehold, either individually or as part of a group, giving you greater control over your property.
What is a Lease Extension?
If you own a leasehold property, it’s important to keep an eye on how many years are left on your lease. A lease extension is the legal process of adding extra years to your leasehold property’s lease.
Most flats and some houses in England and Wales are owned on a leasehold basis. This means you have the right to live in the property for a set number of years, but the land itself is owned by a freeholder.
If your lease drops below 80 years, it can become more expensive to extend, and mortgage lenders may be less willing to lend against the property. By extending your lease, you protect your home’s value, make it easier to sell or remortgage and avoid costly fees in the future.
What is Leasehold Enfranchisement?
Leasehold enfranchisement enables leaseholders to purchase the freehold of their property. For flats, this means a group of leaseholders can buy the building’s freehold and become the owners. For houses, it allows you to buy the freehold of your own home. This gives you more control over the property, removes ground rent, and can help protect its value.
The process is more complex than extending a lease, so it’s important to get expert advice to understand your options. If you’re tired of paying ground rent, want more control over your property, or are looking to increase your property’s value, buying the freehold can be a good move. However, the process can be costly and complicated, so it’s important to weigh the benefits against the costs.
Why do I need to extend my lease?
If a lease runs down to zero, the leaseholder loses the legal right to occupy the property, and ownership reverts to the freeholder. This means any investment made in the property is lost.
As your lease gets shorter, it becomes more expensive to extend and can affect your property’s value. Once it falls below 80 years, the cost to extend rises significantly due to marriage value, which adds a premium to the price. A short lease can also make it harder to sell or remortgage, as many lenders are unwilling to approve mortgages on properties with limited lease terms. Acting sooner rather than later can help protect your investment and keep your options open.
How do I extend my lease?
There are two ways to extend your lease: through the formal legal process or by negotiating directly with your freeholder.
Under the Leasehold and Freehold Reform Act 2024, leaseholders no longer need to own their property for two years before applying for a statutory lease extension. This means you can start the process as soon as you purchase your property. The formal route allows you to extend your lease by 90 years with ground rent reduced to zero. This involves serving a Section 42 Notice, negotiating terms with your freeholder, and completing the extension through a solicitor.
Alternatively, you can negotiate directly with your freeholder, which may be quicker but doesn’t offer the same legal protections. In this case, the freeholder can set their own terms, including potential ongoing ground rent as per the original lease. Ground rents will be reduced to £0 on the extended term.
Choosing the right approach depends on your circumstances, and expert legal advice can help you secure the best deal. Our team is here to guide you through every step.
What is the Leasehold Reform?
The Leasehold and Freehold Reform Act 2024 is a significant piece of legislation aimed at making leasehold ownership fairer for leaseholders in England and Wales. These changes aim to give leaseholders more control over their homes, eliminate ground rent, and improve fairness in the leasehold system. If you’re unsure how these changes affect you, our team is here to offer expert advice.
The key changes include:
Abolition of the 2 year ownership rule
Leaseholders can now extend their lease or purchase the freehold as soon as they acquire the property, without having to wait for two years.
Simplified process
The process for extending leases and buying the freehold has been made easier, with fewer barriers for leaseholders to take action.
Reduction in costs
The Act seeks to reduce the costs involved in lease extensions and freehold purchases, making it more affordable for leaseholders to secure their property’s future. These changes aim to give leaseholders more control over their homes, eliminate ground rent and improve fairness in the leasehold system. If you're unsure how these changes affect you, our team is here to offer expert advice.
Why choose Cavendish?
At Cavendish, we work closely with ONP Solicitors — experts in leasehold matters. While you’ll be supported by our team here at Cavendish, the legal work for lease extensions, leasehold enfranchisement and other related services is carried out by ONP’s experienced solicitors.
We’re here to help you every step of the way, making sure you get what you need and the process runs smoothly.
Get a quote
Book a free consultation with one of our lease extension specialists by clicking here.
Alternatively, please email us at leaseextension@onpgroup.co.uk to get a quote.
Our Team
Jonathan Frankel
Managing Director, Private Client & Leasehold
Jonathan Frankel qualified in 2007 and has been acting for leaseholders and freeholders since he qualified for both non-contentious and non-statutory claims relating to leasehold enfranchisement in the Property Tribunal. The team consists of a department manager who is a solicitor, and 4 case handlers with a department admin & new business associate.