Has anyone extended their lease on a London flat? Advice please

[User23456]

I have 82 years left on the lease of my London flat and the local estate agents told me that it would cost about £15k to extend it.

Has anyone renewed a lease in London and how much did it cost? How much were the solicitors' and surveyors' fees? My flat is a small 2-bed in a cheaper area of London.

According to an online calculation it should cost me between £6k- £8k.

The estate agents handle a lot of sales on the large block of flats where I live, where 70% of flats are affected, and they said their vendors were paying £15k for new leases, and that it would become more expensive the longer I waited.

I was planning to renew before the lease fell to less than 80 years, because of marriage value, which I understand is to be abolished under new legislation to make the lease extension process fairer for leaseholders. Yet it could take years for this new legislation to come in.

Does anyone have any advice please?

I have done, but several years ago now and in a different kind of property. My advice is to get in touch with a specialist leasehold surveyor (you should be able to find one via the RICS) to advise you. And your instinct to do it sooner rather than later is spot on I think.

I helped my grandma with this recently and she did it through a consortium with
Leasehold Solutions. Think it was £10k ish - one bed expensive area of London.

Firstly- don’t take anything estate agents tell you at face value.
Go to www.lease-advice.org/ for independent, government funded advice.
I paid about £10 000 plus legal fees about 10 years ago for my zone 3 flat. It was torturous because the freeholder is absentee ( I’m sure he’s dead, just can’t prove it as not British and dint die here). Also there was only 79years left. Naive 1st time buyer here.
Get cracking now. Once the lease falls below 80 years it’s a lot more expensive, as I found out to my cost.

I paid about £16 including both solicitors’ fees for a 2 bed in east London, with less than 70y left, so I had to pay the marriage value. Your quote seems high to me.

Try asking your neighbours to see if any of them have extended their lease and if they’ll share the price with you.

You can also get a surveyor to get you an estimate but in my experience this was useless - it gave me a ballpark to expect but the freeholder will have a figure in mind. Find out what it is and start negotiations. A good solicitor will help with these.

I extended mine a few years ago by approaching the freeholder directly and reaching an agreement we were both happy with. It was much cheaper than going down the statutory route. The freeholder of my flat owns one of the other flats in the building and we have been friendly neighbours for years though so I guess it depends on circumstances but there's nothing to stop you approaching the freeholder and just making them an offer.

Try asking your neighbours to see if any of them have extended their lease and if they’ll share the price with you.

I second this, the 4 of us leaseholders in my building shared the freeholders legal fees which made a big difference to cost

Mine was £16k but that was 10 years ago and the freeholder was a massive arsehole and we nearly went to court. I used Jonathan Picken at William Sturges who was very good. You need a leasehold specialist rather than a standard conveyancer especially if the freeholder is unhelpful.

I extended mine from 68 years (I think - I know it was way under 80) and I think it cost £18k. It was handled by Leasehold Solutions, they did a bunch of properties on my street, and I found them very good.

I just renewed mine. £7k ish with more years on than you. I didn't want to leave it as I thought it got more expensive the longer you leave it. (Not sure if this is right though!) I paid a solicitor to negotiate / sort. Why is estate agent involved?

We did this about 2 years ago.

The lease extension itself was £18k and the specialist valuation (we had this as we own a lower spec flat in a high spec block so wanted the true value rather than an EA valuation) and solicitors fees together were around £3k I think.

I extended mine about 10 years ago. The leasehold had got down to about 73 years I think. 2 bed flat in zone 2 and it cost just over £20k including fees etc.

Over 80years unless you have a very expensive ground rent should cost very little more than about 3k for both sides surveyors and legals

You need to get on this now before it reaches below 80 years. No one can really give you a price unless you say what ground rent you pay and price of flat with a long lease.

To get the ball rolling get your solicitor to issue a section 42 with your price to your freeholder. They will come back with their valuation and probably instruct a valuer (that you will have to pay for). If you go down the statutory route you will get a 90 year extension and your ground rent will be zero. That is the route I would go for. It can take a long time 6-12 months minimum, and you will be liable for your legal fees, your freeholders legal fees and also the valuation fees. There is a strict timetable to adhere to for statutory extensions so make sure you stick to it or else you could end up paying more.

I would recommend joining National Leasehold Campaign (NLC) on Facebook and ensure you go the formal route of extending the lease otherwise the freeholder could sneak in negative clauses into your lease and you don't have protection

Also be aware of new announcements regarding proposals to scrap marriage value and many changes to make extending leases more affordable and fairer

@archery50

Also be aware of new announcements regarding proposals to scrap marriage value and many changes to make extending leases more affordable and fairer

That is going to take a long time to get through parliament though. The thinking is at least another 2-3 years. By that time the OP will have marriage value to contend with.

@archery50

I would recommend joining National Leasehold Campaign (NLC) on Facebook and ensure you go the formal route of extending the lease otherwise the freeholder could sneak in negative clauses into your lease and you don't have protection

A freeholder wouldn't be able to "sneak in" clauses with an informal lease extension. They can put forward clauses but the OP and their solicitor can reject them, and the negotiations would continue or they would just not complete an informal lease extension. It is very normal in an informal lease extension for the ground rent to be put up, most freeholders would try that once, but then the leaseholder normally gets a cheaper lease extension when going informally.

I do agree that a statutory lease extension is the way to go on this though, and quickly. It will make the property easier to sell with a peppercorn ground rent and a 90 year extension to the 82 years left.

Do we really think it’ll be 2 - 3 years before marriage value goes?

If you’re in marriage value territory once it’s eliminated does that mean you’ll just pay fees?

I've just extended mine. Large block of flats in south London (not posh, but OK, its a 2 bed prob worth about £370-400k). Probably about 35 flats went in on buying the lease in a block of 50. We were quoted about £10k each but it ended up being £6.5k, which I think is relatively cheap. That included all fees. I think it is always better to become a freeholder and it will cost you a lot more to do it on your own when you eventually have to.

I was also told that some mortgage companies will let you borrow the cost of the freehold against the mortgage? Unfortunately, mine wouldn't.

@1990s

Do we really think it’ll be 2 - 3 years before marriage value goes?

If you’re in marriage value territory once it’s eliminated does that mean you’ll just pay fees?

It is only in the first stages of consultation. 2-3 years is probably a best case scenario. Personally I think it will be 4-5 years before major changes in leasehold flats.

Leasehold houses are a different kettle of fish, but flats need maintenance that everyone has to pay for through service charges. A new system (probably similar to the Scottish system) will need to be set up for leaseholders in flats.

@ramblingsonthego by 'sneaking' I meant that they won't always make it expressly clear and unless you have a really on the ball solicitor the new terms may be put in the lease which a lot are written in legal terms, so may not be fully understood by the average person

I’ve only done it where I had share of freehold and we only paid management company fees and legal fees; approx £1k per flat.

Thanks very much everyone for your responses and advice. It is something I need to seriously start looking into. However, on Martin Lewis's moneysavingexpert website, as long as you lodge the extension before 80 years is up, the clock stops.

I also found this on the Gov.uk website:

Damn, I posted too soon!
This is what it says on Martin Lewis's website about when to serve the notice for lease extension:

Though it's worth noting that the clock stops counting once you serve the notice, so if you file at 81 years, the lease won't tick down to 80.

His website has also been updated to reflect the pending legislation and states:

There's no exact date for when the changes will come in yet, but the Government says it hopes to legislate as soon as possible. As such, you may want to consider delaying a planned lease extension as you may well be able to do it much cheaper.

Also, the govt says marriage value is being scrapped. Gov.uk states:
*The government is abolishing prohibitive costs like ‘marriage value’ and will set the calculation rates to ensure this is fairer, cheaper and more transparent."

See:
www.gov.uk/government/news/government-reforms-make-it-easier-and-cheaper-for-leaseholders-to-buy-their-homes

So given these factors, perhaps I could wait another 6 months or so to see what happens.

The Leasehold Advisory site calculator quoted me £6k to £8k for me flat which is worth £250k - a small two bed - and ground rent is £200 per year.

To the OP who asked - estate agent isn't involved as such - I just popped in for a chat about possibly renting my flat out. They have sold a lot of flats in my block and the 15k figure was just their anecdotal experience of what people were paying so they could sell their flats more easily.

However, there is some great advice here, so thank you all. It really grieves me that when I was looking to buy about 7 or 8 years ago I lost out on a bigger flat with a 900-odd year lease (and a garden!) because of my dithering. I lived to regret it as the market rose and I was priced out.

Interesting too to hear about the poster who went in on a group lease extension and got it for a great price. I am tempted to make an approach directly to the freeholder but on the other hand I complained about the service charge going up, so perhaps not!

Thanks all for your excellent advice peeps!

My flat