Is Now The Right Time To Extend My Lease?

Beneficial Tenants Commercial Property

You may have heard about the planned changes to the law that may make lease extensions more accessible for property owners, cheaper, and more favourable terms.

Major leasehold reform has been announced and is currently making its way through Parliament. However, we do not know when the changes will come into play or what exactly those changes will be.

Why do I need to extend my lease?

Flats and apartments are usually held on a lease for a set period, e.g. 99 years, 125 years, or 999 years. A leasehold property with a decent length left on the term makes it a desirable asset to invest in.

However, the shorter the lease term remaining, the more negative impact this can have. If the term on your lease is approximately 80 years or less, then you may want to consider pursuing a statutory lease extension for the following reasons:

  • It can make the property harder to sell and secure mortgage finance as mortgage lenders may be unwilling to secure mortgages on it.
  • The premium payable for the extension will be more expensive.

Is now the right time for a lease extension?

If you meet the qualifying criteria for a statutory lease extension, but still have a favourable term on your lease, i.e. 80 plus years, then you may decide that you want to want to see the outcome of the leasehold reform.

However, where your term has reduced to 80-90 years or less you may want to pursue a lease extension to protect your investment in the property.

How do I extend my lease?

There are two ways you can extend your lease:

  1. You can enter into negotiations with the landlord, and if you are agreeable to terms and premium you should instruct your solicitor to carry out those new terms.
  2. If you are unable to agree with the landlord, and are subject to meeting certain qualifying criteria, you have a Statutory right under the Leasehold Reform, Housing and Urban Development Act 1993 to extend the term of the lease. This follows a strict statutory timetable and therefore you will need to instruct a solicitor to ensure that this timetable is followed.

How we can helpExtend My Lease

Rachel Maxwell is a Senior Associate in our expert Residential Property team, specialising in a wide range of conveyancing matters, including freehold and leasehold property sales and purchases.

At Nelsons, we can advise you on your rights as a leaseholder to acquire a lease extension by either negotiating with the landlord or by enforcing your statutory rights. We can discuss your options and guide you through the process so that you can make the decision on whether now is the right time to extend your lease.

Please call 0800 024 1976 or contact us via our online form for a guaranteed response.

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