Leasehold Extension Valuations

Leasehold properties — usually flats — make up 20 per cent of the housing stock in the UK with an estimated 4.86 million homes in the UK subject to the arrangement. Leasehold refers to a temporary right to lease land or property from a freeholder, which historically involved paying ground rent. This means that the homeowner only owns the property for a specified period, typically between 99 and 125 years, after which ownership reverts back to the freeholder.

Why Choose Barnes and Barnes for your Leasehold Extension Valuation?

 

We have valued thousands of London properties over the last 20 years. From our offices in Islington and Fulham High Street, we survey and value properties across Central LondonSouth West LondonSouth East London and North London areas.

Our surveyors are all Chartered Surveyors and members of RICS, giving you peace of mind that we adhere to external professional standards.

Our team regularly receives feedback on our customer service, so you can rest assured you or your client is in good hands.

We were impressed by the professionalism and quality of our survey. Our Market Value report was comprehensive and delivered in a short time frame. We would definitely recommend.

T Taylor ⭐⭐⭐⭐⭐ - March 2023
T Taylor

Barnes and Partners carried out a probate valuation for me following the death of my wife. It all went well and was completed in around a week.

Guy T - March 22 5 Stars
Guy T - March 22

Valuation of residential property. An informative report was produced on time and for a reasonable price. Helpful and polite staff.

B Smith October 2021
B Smith

What is a lease extension?

If you own a leasehold property, a lease extension refers to the legal agreement of extending the term of your lease. If you don’t extend your lease, at the end of its term the property will revert to the freeholder.

Extending a lease can be an alternative to the rights flat owners have to acquire the Freehold from the Landlord (for example, if there are not enough people willing to take part in obtaining the Freehold from the Landlord or the building does not qualify)

Why do I need a leasehold extension?

Under the Leasehold Reform and Urban Development Act 1993, leaseholders who have owned their home for at least two years have a statutory right to extend their lease by 90 years for a flat or 50 years for a house, though this excludes those on shared ownership schemes who do not yet own 100 per cent of the property.

Once the term of your Lease gets shorter, it will become more difficult to sell. The majority of Banks and Building Societies will not lend where a Lease has approximately 55-65 years left to run and once this period has been reached it can difficult to a flat to any purchaser who requires a mortgage.Leaseholders should be looking to extend their lease before it falls below 80 years. The fewer years left to run on the lease the more the lease extension will cost

Will the leasehold extension increase the value of the property?

A lease extension will increase a property’s market value. As a lease depreciates the closer it is to the end of the term, extending the lease protects the value of it.

Who is eligible for leasehold extension?

To be a qualifying leaseholder you must own a ‘long lease’, and have been the registered owner at the Land Registry for at least the past two years and not be a business or commercial tenant.  You don’t need to have lived in the property for this period, just owned the lease for two or more years.

What is a leasehold extension valuation?

Leasehold extension valuation plays a crucial role in determining the cost of extending your lease. It provides you with an estimate of the value of your lease extension, allowing you to negotiate fair terms with the freeholder.

​Do I need a specialist to value the leasehold extension?

A qualified valuer can provide you with an accurate and unbiased assessment of the value of your leasehold extension, ensuring that you are not paying more than necessary.

When hiring a valuer, it is important to look for someone who is a member of a recognised professional body, such as the Royal Institution of Chartered Surveyors (RICS). This ensures that they adhere to strict professional standards and follow best practices in leasehold extension valuation.

Working with a professional valuer will not only provide you with an accurate valuation but also give you peace of mind knowing that you have expert guidance throughout the leasehold extension process. They can assist you in negotiations with the freeholder, ensuring that you achieve a fair and favourable outcome.

How much does a leasehold extension cost?

The lease extension process cost depends on the value of the property, the number of years left on the lease, the annual ground rent, the value of improvements done to the property paid by the leaseholder and external factors such as expected rate of returns on investments. The lease extension valuation is a complex calculation, but also a subjective one which means it is open to negotiation – or decision by a tribunal.

It is advisable to ask this question to a qualified surveyor. They will be able to provide a range that the leaseholder should expect to pay

In addition to the cost of the lease extension the leaseholder will need to pay their own legal fees as well as the freeholder’s reasonable costs for employing solicitors and other professionals