Lease extensions

• You must have owned the property for at least two years.
• The original lease must have been granted for a minimum of 21 years.

When a lease gets shorter, property value can decrease, making it harder to sell due to the uncertainty of the cost to extend it. The shorter a lease gets, the more costly it is to extend it.

A leaseholder is entitled to a 90-year extension on top of any remaining years on the lease. Any ground rent currently payable is reduced to a peppercorn — typically £1 annually — on completion.

• Step 1: Instruct a valuer to fully inspect the building and supply a valuation report. The report will give you an idea of the 90-year lease extension cost and a lower figure for serving the Section 42 notice on the freeholder. It’s important the valuation is carried out in accordance with Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993.
• Step 2: Once you have the valuation report, you can instruct a solicitor to serve the Section 42 notice, after which the freeholder has two months to reply with a counter-notice.
• Step 3:  When you have the counter-notice, you have six months to negotiate and agree on a final price.
  • If a price is agreed upon, an application to the tribunal needs to be made via your solicitor within the six-month negotiation period to keep the claim active.
  • If you’re unable to agree on a price and no application to the tribunal is made, the claim is classed as withdrawn and you’ll need to wait 12 months to start the process again.

• Buildings within a cathedral precinct
• National Trust properties
• Properties owned by the Crown
• Properties that include any track part of an operational railway, including a bridge, tunnel or retaining wall