Options for lease extension and freehold purchase
If you own a flat, and in some cases, a house, you may be paying ground rent or a yearly figure towards the leasehold for the property. Each leasehold has a set number of years and as this number decreases so does the value of the lease, making it harder to sell the property. There are options to extend the lease or buy the freehold and we can investigate if any of these options are available to you.
Can I extend my lease?
You can approach your landlord at any time to request and negotiate an extension of your lease. However, unless you apply (for a flat) for an extension under the Leasehold Reform, Housing and Urban Development Act 1993 (‘the Act’), your landlord is not obliged to grant you an extension.
Under the Act you are granted a ‘statutory lease extension’. This is the right to a new lease for a term that is equal to the outstanding time on your existing lease plus 90 years. The additional 90 years will be given with what is known as a ‘peppercorn rent’. A peppercorn rent essentially means that any responsibility to pay ground rent under the existing lease is extinguished. Under the Act the new lease will otherwise be on the same terms as the existing lease.
Do I qualify under the Act?
You qualify to apply for a leasehold extension under the Act if the term of the lease, when it was originally granted, was over 21 years and you have been the registered owner of the lease for at least 2 years (you do not have to have actually lived in the property).
You will not be entitled to a statutory lease extension if:
- The property is owned by the Crown (i.e. the monarch)
- The freehold of the property is owned by the National Trust
- The building is within a cathedral precinct
- The landlord is a charitable housing trust and the property is provided as part of its charity functions
- The lease is a commercial / business lease
Buying the freehold
It is possible to negotiate to buy the freehold; this is a complex process but we can give you individual advice around what to do in your situation.
Usually you can only do this if you join with other flat owners in a building. Some houses are also leasehold – there is a separate legal process which allows you to buy the freehold if terms are not agreed informally with the freeholder.
Options for lease extension and freehold purchase
If you own a flat and in some cases, a house, you may be paying ground rent or a yearly figure towards the leasehold for the property. Each leasehold has a set number of years and as this number decreases so does the value of the lease, making it harder to sell the property. There are options to extend the lease or buy the freehold and we can investigate if any of these options are available to you.
Can I extend my lease?
You can approach your landlord at any time to request and negotiate an extension of your lease. However, unless you apply (for a flat) for an extension under the Leasehold Reform, Housing and Urban Development Act 1993 (‘the Act’), your landlord is not obliged to grant you an extension.
Under the Act you are granted a ‘statutory lease extension’. This is the right to a new lease for a term that is equal to the outstanding time on your existing lease plus 90 years. The additional 90 years will be given with what is known as a ‘peppercorn rent’. A peppercorn rent essentially means that any responsibility to pay ground rent under the existing lease is extinguished. Under the Act the new lease will otherwise be on the same terms as the existing lease.
Do I qualify under the Act?
You qualify to apply for a leasehold extension under the Act if the term of the lease, when it was originally granted, was over 21 years and you have been the registered owner of the lease for at least 2 years (you do not have to have actually lived in the property).
You will not be entitled to a statutory lease extension if:
- The property is owned by the Crown (i.e. the monarch)
- The freehold of the property is owned by the National Trust
- The building is within a cathedral precinct
- The landlord is a charitable housing trust and the property is provided as part of its charity functions
- The lease is a commercial / business lease
Buying the freehold
It is possible to negotiate to buy the freehold; this is a complex process but we can give you individual advice around what to do in your situation.
Usually you can only do this if you join with other flat owners in a building. Some houses are also leasehold – there is a separate legal process which allows you to buy the freehold if terms are not agreed informally with the freeholder.
