Extending your Lease or Buying the Freehold

Extending your Lease

Extending Your Lease

If you are the Leaseholder of a Flat or House and your Original Lease is becoming shorter it can sometimes be a problem to sell the property to someone who needs a Mortgage.

It is possible to extend the Lease of your property by virtue of the Leasehold and Commonhold Act of 1993 (as amended) Put simply, as long as certain conditions are met, you can extend your Lease for a period of up to 90 years on top of your existing Lease term and there will be no further ground rent to pay. There is however a price to pay to the Landlords as they lose the right to receive the ground rent and effectively do not get their property back for a further 90 years.


The Landlord will be entitled to:


Compensation for the loss of Ground Rent and the reversion


50% of the Marriage Value (The difference between the existing Value and the Value with an extended Lease, although this only applies to Leases which have less than 80 years to run)


Compensation for loss of any Development Value

Surveyline Chartered Surveyors can advise on these matters and prepare a report for you in order that you can serve the initial notice on your Landlord and commence the procedure.

One Valuable tip if you are considering an Extension is to serve the notice whilst the Existing Lease has more than 80 years to run. This avoids the cost of Marriage Value (the Leaseholder pays half of this element) and it applies when the original Lease has less than 80 years left. Thus if your Lease has in excess of 80 years to run do not delay extending until the lease has only 79 years or less. It may save you a considerable amount of money.

Although the original Residency qualification has been abandoned by subsequent legislation it is still necessary to have owned the Leasehold Interest for a period of two years prior to serving notice.

CONTACT SURVEYLINE for a quotation on a Lease Extension Report

Buying the Freehold Interest

The right to purchase the freehold of a building may only be exercised where the participating leaseholders represent at least half the total number of flats in the building; for example, if there are 20 flats in the building, at least ten of the flats in the building must participate in the purchase. Where there are only two flats in the building both leaseholders must participate.


Qualifying as a leaseholder

To be a qualifying leaseholder requires a long lease, which is:


Qualifying as a leaseholder

To be a qualifying leaseholder requires a long lease, which is:

  • a lease of a term of years absolute in excess of 21 years; (the present unexpired term is not relevant, qualification is governed by the original term of the lease when first granted)
  • a shorter lease which contains a clause providing a right of perpetual renewal
  • a lease terminable on death or marriage or an unknown date
  • the continuation of a long lease under the Local Government Housing Act 1989 following the expiry of the original term
  • a shared ownership lease where the leaseholder's share is 100%

But, even if the leaseholder satisfies the above criteria, you will not be a qualifying leaseholder if any of the following cases apply:

  • the landlord is a charitable housing trust and the flat is provided as part of the charity's functions
  • the leaseholder owns more than two flats in the building
  • the leaseholder has a business or commercial lease

The Building

  • there must be a minimum of two flats in the building
  • at least two-thirds of the flats must be leasehold
  • no more than 25% of the internal floor area to be in non-residential use

There is no right of collective enfranchisement (but there is a right to renew the lease) where:

  • the building is a conversion into four or fewer flats and not a purpose-built block and the same person has owned the freehold since before the conversion of the building into flats and he or an adult member of his family has lived there for the past 12 months
  • the freehold includes any track of an operational railway, including a bridge or tunnel or a retaining wall to a railway track

Some properties are completely excluded from the rights of lease extension and collective enfranchisement:

  • Buildings within a cathedral precinct
  • National Trust properties
  • Crown properties*
*Although the Crown is not bound by the legislation, the Minister has made a statement to the House of Commons that the Crown will be prepared to comply with the principles of it.

The Purchase of your Freehold (Collective Enfranchisement) will require a Valuation of the relevant Interests in the Building and Surveyline Valuers can advise Leaseholders and carry out the proceedure on their behalf.

If you would like us to place you in touch with a local Chartered Surveyor to advise you on Extending your Lease or Buying the Freehold please Click here for a quotation