Lease extensions and buying your freehold

Most leaseholders seek a lease extension or purchase the freehold of their building only once.

It can be a stressful experience.

A lease is a wasting asset. As the term reduces so does its value, and as the unexpired term gets shorter the effect on value increases as does the cost of the premium.

Fortunately the Leasehold Reform Housing and Urban Development Act 1993 gives the leaseholder a right to protect the value of their home or investment – either by extending your lease or purchasing the freehold (sometimes called enfranchisement).

As with any specialism whether it be car mechanics or leasehold reform you need the right person for the right job. Not all surveyors specialise in lease extension valuations and nor do all solicitors specialise in the necessary procedures and service of Notices to protect your statutory rights.

At Hindwoods we act in South London for both landlords and tenants and so we know the arguments from both sides of the fence. We provide both the initial valuation to help you understand the likely cost and enable Notice to be served and also negotiation with the lessor or lessee.

You are entitled to a new lease for a term of 90 years plus the existing unexpired term at a peppercorn (nil) ground rent.

Put simply you are compensating the freeholder for his losses.

These are:

• The capitalised loss of ground rent
• The value of the property deferred to the end of the term
• The freeholders share of any marriage value (if your lease has less than 80 years left)

Marriage value is in simple terms the difference in value between your property with its existing lease and once you have a new long lease. The difference is shared equally between freeholder and lessee.

If you would like an informal chat or further information feel free to call on 020 8299 9153 or contact us by e mail .