If you own a leasehold property, you need to be aware of the length of your lease. It is important to consider extending it if it drops below a certain number of years remaining. We look at when you may need to extend your lease, why this might be necessary and answer the question, how do I find out the length of my lease?

At Lockings Solicitors, we have been dealing with leasehold property in Beverley, Hull and York for many years. Our clients include property owners, those buying leasehold property, landlords and management companies. We are known for the exceptional service we provide and if you ask us to assist with a leasehold sale or purchase, we will make sure that you have all of the information you need and that you are kept up to date with progress.

We have a high level of expertise in the complex area of leasehold property law and deal with leasehold conveyancing and provide leasehold property advice.

We offer a FREE initial chat so that you can ask us any questions you may have about leasehold property. Call us on 01482 300 200, email us at welcome@lockings.co.uk or fill in our Free Online Enquiry and we will call you back promptly. We have offices in Beverley, Hull and York and represent clients across the East Yorkshire area.

What does leasehold mean?

If you own a leasehold property, a freeholder, also referred to as a landlord, owns the land and buildings, while you have the right to live there in accordance with the terms of the lease.

The lease will set out the number of years you have the property and how much the ground rent is. It will also contain rules and regulations about the use of the property. For example, you may need the landlord’s consent before carrying out alterations or letting the property and there may be restrictions in respect of noise and pets.

If the property is a flat, you will need to pay a sum of money to the landlord or management company each month. This is for expenses for items including buildings insurance, which the landlord will generally arrange, maintenance and repairs to the building and utilities for the common areas. You will also need to pay ground rent.

Flats are generally leasehold, but there can be freehold houses too, although the government is considering banning the sale of new leasehold houses.

How do I find out the length of my lease?

If you are buying a leasehold property, we will let you know how long the lease is and how many years are remaining. For example, a 99-year lease granted ten years ago will have 89 years remaining.

If you already own a leasehold property, you can check the legal title or your lease to find out how many years are left. This may be held with your records from when you bought the property or it can be obtained from the Land Registry. If you need help with this, please feel free to call us and we can assist you.

Why is it important to know how many years are left on a lease?

You need to know how many years you have remaining on your lease so that you can decide whether you need to extend it.

Once a lease falls to around 70-80 years remaining, mortgage lenders may be reluctant to lend, meaning your property will be harder to sell and worth less than properties with longer leases.

When you extend a lease, you will be required to pay the landlord a premium. Once the term remaining falls below 80 years, there is an additional payment that you will need to make when extending it, known as the marriage value.

Marriage value is the increase in the value of the property that will happen once a lease is extended. This financial benefit is split equally between landlord and tenant, so you would need to pay 50% of the marriage value to the landlord along with the premium for extending the lease.

If you can extend your lease before it reaches the 80-year mark, you can avoid the need to pay marriage value. You will still need to pay a premium to the landlord.

Do I need to extend the lease of my flat or freehold house?

If a lease falls to the point where lenders will not offer a mortgage, it will make a property much harder to sell and its value will drop.

By extending in plenty of time, you can avoid this situation.

How do I extend my lease?

First, you need to check that you have the right to extend your lease. If the lease was originally granted for 21 years or more and you have owned the property for at least two years, you will usually have the right to extend. If the property is a flat, you can extend the lease by 90 years. If the property is a house, you can extend it by 50 years.

If you extend your lease, the ground rent will be reduced to a peppercorn, meaning no rent will be payable.

If you are using the formal lease extension route, you will need to instruct an expert leasehold valuer to prepare a valuation of the cost of the lease extension. They will look at a range of points, including the length of the lease, the term remaining and the ground rent. Calculating the amount payable can be complex and is generally subject to negotiation with the landlord.

You are also advised to instruct a solicitor to deal with the extension on your behalf. They will ensure that a correctly drafted notice is served on the landlord, advising them of your wish to extend your lease.

Your solicitor will negotiate with them over the price to be paid. If an agreement cannot be reached, you can apply to the First-tier Tribunal (Property Chamber) for a decision. This is a specialist property court that can give you and your landlord a set premium.

Once the price has been decided, the extension will be completed, to include registering this with HM Land Registry.

When should I extend my lease?

It is generally recommended that a lease is extended before it falls below the 80-year mark. This will mean that there is no requirement to pay marriage value. If you are considering selling your property, it could be advantageous to extend your lease before you put the property on the market if the lease is approaching 80 years remaining.

Legislation is currently working its way through Parliament which is intended to make it quicker and easier to extend a lease. There is no time scale for this at present, although the first stages are in progress.

The following changes may be made:

• Abolishing the need to own the property for two years to be eligible to extend a lease
• Abolishing marriage value and bringing in a set calculation for working out the price to be paid to the landlord
• Increasing the extension period to 990 years

Are there other options to extending a lease?

Another option is to consider purchasing the freehold. If you are in a flat, then you will usually have the right to buy the freehold, provided at least half of the leaseholders want to do this. If the property only has two flats, then both leaseholders need to join in the purchase.

Again, a premium is payable to the landlord based on the value of the freehold interest. Once you and your fellow leaseholders have purchased the freehold, which is usually done by establishing a management company, you can extend all of your leases without the need to pay for them.

Contact our East Yorkshire leasehold property solicitors

Our property team have extensive experience in dealing with leasehold sales and purchases.

We offer a FREE initial chat so that you can ask us any questions you may have about leasehold property. Call us on 01482 300 200, email us at welcome@lockings.co.uk or fill in our Free Online Enquiry and we will call you back promptly. We have offices in Beverley, Hull and York and represent clients across the East Yorkshire area.