How To Extend A Lease In Rochdale

Perhaps you’re looking to sell, or you need the security for your family’s future? If you own a home in the Norden, Littleborough or Bamford then you may well want to know how to extend a leasehold.

You’re certainly not alone. The leasehold market in the North West England is the largest outside London, with over 32% of homes owned on a leasehold basis. But how easy is it to extend a lease – and what will it cost? Though the process can be daunting, it’s easier once you know what to expect. Read on to find out how to extend the lease on a flat or house in our guide.

What Is A Lease Extension?

A lease permits you to live in a property for a certain number of years – a lease extension buys additional time from the freeholder. The proposed Leasehold and Freehold Reform Bill 2023-24 could rewrite the rules on lease extensions in England and Wales, so bear in mind that the situation may change.

When Can You Extend A Leasehold?

Leaseholders must own their property for a minimum of 2 years before applying for an extension. There’s a financial incentive to extend promptly. Once you have fewer than 80 years left on the lease, landlords can currently charge 50% of the value gained by the extension (known as marriage value). So how much it costs to extend a 75-year lease, for example, could be more than you expect.

How Long Does It Take To Extend A Lease?

Extending the lease can take 4-12 months. The Leasehold Reform Act allocates set timeframes: 2 months for the freeholder to respond to the section 42 notice with a section 45 notice, 6 months to negotiate, plus time to settle the terms of the new lease. If you take a dispute to the Leasehold Valuation Tribunal, this adds around 4 months. Registering the new lease can take several months.

How Much Can You Extend A Lease By?

Qualifying flat owners are legally entitled to extend their lease agreement by 90 years, and house owners by 50 years. The new bill proposes that the standard lease extension term could be increased to 990 years.

How To Extend A Lease

There are two ways to extend your lease agreement – research your options and engage a professional surveyor and solicitor to guide you.

Informal Lease Extension

The informal lease extension process is more flexible, so it’s tempting if you’re wondering how to extend a lease by 20 years only – or how to extend a lease to 999 years. You may save money, but the freeholder isn’t obligated to agree, and can add unfavourable terms.

Formal Lease Extension

A formal lease extension is more structured, and the leaseholder is legally entitled to a set process under under the Leasehold Reform Act.

Applying For A Leasehold Extension: The Process

The Leasehold Reform Housing and Urban Development Act 1993 defines the rules of the leasehold extension process. As a leaseholder, here’s what you need to do:

• Make Sure You’re Eligible

Check that you’re eligible for a lease extension.

• Instruct A Solicitor

Instruct a trusted solicitor. They will know how to write a letter to extend a lease and hand the legal side throughout.

• Instruct A Surveyor

Select a surveyor. Their lease extension valuations will cover best and worst case scenarios so you can budget before proceeding.

• Collect Information

Collect your property ownership documents and details of the competent landlord and head leaseholders. You may already have their details for service charge and ground rent payments. Under the Landlord and Tenant Act 1985, you’re entitled to be issued with your landlord’s name and address within 21 days when you request them.

• Serve Notice Of Your Offer

Issue your freeholder with a formal notice of your opening offer. They will ask for a deposit of whichever is higher: £250, or 10% of the proposed lease extension cost.

• Negotiate With The Freeholder

If the freeholder doesn’t accept, they can issue a counteroffer. If an agreement can’t be reached, contact the Leasehold Advisory Service. If necessary, apply to a First-Tier Tribunal.

• Land Registry

The new lease is registered to complete the process.

How Much Does It Cost To Extend A Lease?

Actual costs of extending a lease vary, but you will have to cover the lease extension premium of around £5,000 or more, your surveyor and solicitor could charge around £1000 each, plus the freeholder’s valuation and legal fees and Land Registry fees of £20-£40. An online lease extension calculator can estimate the cost based on your own property and situation.

If you want to discuss extending your leasehold, contact Cowell Norford. As the longest-established agents in Rochdale, we know the local property landscape well.

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