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?

Definitely extend asap.

I'm currently extending the leasehold on a flat I've just inherited which has only 20 years left, and it's costing me about £80k which is insane.

Anything under 80 years and the price shoots up.

I don’t think the legislation will be enacted before you need it if you’re at 82 years now.

You probably are going to have to accept that you’ll have to pay. It’s a real shame.

I’m waiting for the law to change too so I can extend my lease and get zero ground rent. It’s because there is an increasing clause in the ground rent. It isn’t doubling or particularly onerous, but the trouble is mortgage lenders are very anxious and increasingly won’t lend. Mine is currently £150 and in 5 years will become £250 and then in 30 years £300, 55 years £400 and 80 years £500. None of these figures in the context of rising house prices is actually very shocking over the timescale, but anything over £250 these days is a bit of a no-no for mortgage lenders.
Anyway, as I have 105 years left, I think I’ve got the luxury of waiting until the legislation is passed.
Does anyone have an idea though, if I extended now, with 105 years and the ground rent as listed above what it would be worth. Flat worth about £190,000.

My ground rent goes up from £250 pa to £500 in January 2026. There are about 70 flats in my block but we can't get the requisite 50% of leaseholders to agree to buy the freehold (which won't come cheap) plus we've been warned we will have to pay for the cladding removal which affects a small part of one of the buildings! Like many others I have no idea where to find the money :-(

I have 101 years left on my lease but only 5 years before the ground rent increase. Service charge already costs £300 per month after a recent increase (London).

Money box live on radio 4 today was all about lease law and the upcoming changes. Well worth a listen on BBC sounds. Will answer a lot of the questions posted above.

Just another thought. If you are hoping the proposed changes would make your lease extension free you will be really disappointed. The proposed (and that is all they are at the moment) changes would do away with "marriage value" but you would still have to pay to extend the lease plus pay the legal fees and valuation fees. I honestly would suggest issuing a S42 as soon as you can afford to as it will be a lot cheaper to do now via way of a statutory lease increase which will reduce your ground rent to zero and increase your lease by 90 years (taking your lease to 172 years). The ground rent being zero will make your flat more sellable in the future as well.

@WombatChocolate

I don’t think the legislation will be enacted before you need it if you’re at 82 years now.

You probably are going to have to accept that you’ll have to pay. It’s a real shame.

I’m waiting for the law to change too so I can extend my lease and get zero ground rent. It’s because there is an increasing clause in the ground rent. It isn’t doubling or particularly onerous, but the trouble is mortgage lenders are very anxious and increasingly won’t lend. Mine is currently £150 and in 5 years will become £250 and then in 30 years £300, 55 years £400 and 80 years £500. None of these figures in the context of rising house prices is actually very shocking over the timescale, but anything over £250 these days is a bit of a no-no for mortgage lenders.
Anyway, as I have 105 years left, I think I’ve got the luxury of waiting until the legislation is passed.
Does anyone have an idea though, if I extended now, with 105 years and the ground rent as listed above what it would be worth. Flat worth about £190,000.

Use a leasehold calculator to get a rough idea of the cost. It might be cheaper than you think. You will need dates of your lease etc.... so no one can do it for you.

If you have lived their 2 years go for a 90 year statutory extension and get your ground rent down to zero.

@ramblingsonthego

Just another thought. If you are hoping the proposed changes would make your lease extension free you will be really disappointed. The proposed (and that is all they are at the moment) changes would do away with "marriage value" but you would still have to pay to extend the lease plus pay the legal fees and valuation fees. I honestly would suggest issuing a S42 as soon as you can afford to as it will be a lot cheaper to do now via way of a statutory lease increase which will reduce your ground rent to zero and increase your lease by 90 years (taking your lease to 172 years). The ground rent being zero will make your flat more sellable in the future as well.

Hi Ramblings, I wouldn't expect to extend my lease for free! (If only!) I have been told anecdotally that people on my estate are paying £15k for lease extensions, but these people want to sell their flats now.

I plan to hold on to my flat for between 2 to 3 more years.

I understand that under the present system, you "negotiate" (haggle) with the freeholder to agree a price. Under the govt reforms, it is understood that a proper pricing structure will replace this bartering system that is much fairer for leaseholders. So in theory if I wait, I could end up paying a fairer price of £10k instead of the £15k I've been told my neighbours are paying to extend now, even if my lease drops below 80 years.

This is because marriage value will be scrapped by the govt, so it may not cost me much less to extend at 78 years than at 82 years, and if I extend after the reforms I will get a 900 year new lease instead of a 90 year one - which will maximise the property's appeal when it comes to selling.

To me, this leasehold extension system seems like a racket, with everyone on the take, and I just feel I'm going to get ripped off.

The rising ground rent though is a very good point that I will look into.

Just for the record, as I have seen a couple of other posts suggesting similar, I am not trying to get a lease extension for free! I know I will have to pay for one. I just don't want to pay over the odds if a fairer system will take effect in a few years' time whereby I pay a reasonable and fair sum with the added bonus that I get a much longer lease extension that will maximise my flat's appeal.

@User23456 a statutory lease extension does have a set calculation and formula. If you went down that route you would get a valuation and then your freeholder would get a valuation (that you pay for) and they will be roughly the same for a statutory extension. This will reduce your ground rent to zero. If you wanted an informal lease extension then yes your freeholder can tell you any price and also change your ground rent (a lot of freeholders will do a slightly cheaper lease extension but rack up the ground rent charges.) You could do a lease extension up to 99 or 125 years or your freeholder may allow a 999 year lease extension (but be prepared for £££ for that one). My advice is still go down the statutory route, a 172 year lease is still a fantastic length lease, any buyers won't have to pay ground rent anymore either.

I am still bitter about the cost of extending mine 10 years ago - £24k, when costs were added. It got down to (I think) 69 years, which I now know is terrible, but I was badly advised by my conveyancers when I bought it - other flats on the same development, including one owned by family members, had 1000 year leases granted at cost by their freeholder, and my solicitor neglected to point out that, for weird historical reasons, my flat was in a block with a different, less benevolent freeholder so this didn't apply. I did consider trying to sue them for negligence (this wasn't the only issue with the purchase), but the evidence wasn't clear cut enough and I just had to suck it up.

Moral of the story - do it, and do it now! Or it will be very, very expensive!

Thanks Ramblings. However, I'm still confused about what you say is a set calculation via the statutory route, as I've had an email from a leasehold valuer saying the price will be negotiated in the statutory process.

It says:

1. Our fee to act on your behalf in any negotiation of the price payable will be chargeable at an hourly rate of £250 plus VAT.

Please note lease extension prices are subject to negotiation.

1. Should the freeholder fail to agree to an appropriate price for a

statutory claim, the matter may be need to be referred to the First-tier Tribunal.

There is an initial £650 fee (+ VAT) for their advice, plus the £250 (+ VAT) an hour for negotiating the cost (estimated at 3 hours maximum).
Then if it goes to tribunal, the valuer's fee would be another £220 an hour (presumably on top of barrister's fee).

If it didn't go to a tribunal the valuer's cost would be approx £1,600. The tribunal costs don't bear thinking about!

@User23456 have a read on here www.lease-advice.org/advice-guide/lease-extension-getting-started/

It sets out the whole process.

What you need is a leasehold solicitor (not a conveyancer) and a valuer. You can get a valuer on a set fee (we recently instructed one for £450 + VAT) that will just do the valuation for you. This is the price you will use to put on your S42 (you could try a little lower than that figure and hope the freeholder doesn't get it done in time and it times out. Do not try ridiculously low as that can be counted as an invalid offer). The freeholder will then no doubt get a valuer involved that they choose (you will have to pay the reasonable costs for this. Ie. they cannot charge you £5k for a valuation) and do a counter offer within the prescribed timeline set out in law. If they are way apart then go to first tribunal and they will use a set formula anyway. It would be stupid for a freeholder to want it to go to tribunal.

PS. You do not need a barrister for a first tier tribunal. That is way overboard. Your local leasehold solicitor would do just fine.

Did this about 6 years ago, 2 bed garden flat zone 2. It had 66 years left and cost approximately 20k to add another 80 years.

As a first time buyer, I find it amazing that solicitors do not inform buyers of the repercussions of buying a flat with 80 or years less on it. I complained , to no avail.

Hi Ramblings, that is immensely helpful, thank you! Is/was your leasehold home in London? I'm curious - and hope you don't mind me asking - did you pick all this knowledge up as a result of your own experience or do you work in the industry?

Lonelycrab - sounds as if you got a reasonable deal given you're in zone 2. I know of 3 others whose extensions cost £16k when they were either near or just below 80 years but they were all in decent areas of London - unlike me, in a cheap area!

I don't know if this actually makes a difference. Presumably it does because it would affect your property value?

We did in late 2019 on our rental property. The lease itself was £6000, valuation fee was £450, our solicitor's fees were £1000 and the freeholder's solicitor's fees were £700. I think our lease was at 84 years when we extended it. Our freeholder is a housing association but I understand from speaking to other people and chatting with our solicitor that because of that this was quite reasonable in terms of cost compared to what some private freeholders charge..

User it was a repossession which took over a year to buy and needed complete gutting so probably not your average first time buy! But yes you do have to factor in the price of getting the lease up to a point where the property is sellable.

@CeibaTree

We did in late 2019 on our rental property. The lease itself was £6000, valuation fee was £450, our solicitor's fees were £1000 and the freeholder's solicitor's fees were £700. I think our lease was at 84 years when we extended it. Our freeholder is a housing association but I understand from speaking to other people and chatting with our solicitor that because of that this was quite reasonable in terms of cost compared to what some private freeholders charge..

Forgot to say, this is a 3 bed flat in SW London.

@User23456

Hi Ramblings, that is immensely helpful, thank you! Is/was your leasehold home in London? I'm curious - and hope you don't mind me asking - did you pick all this knowledge up as a result of your own experience or do you work in the industry?

No, I am the arch enemy and I'm a freeholder. But I am also a fair freeholder and don't rip off the leaseholders as I used to live in the block. I want to sell the freehold now but none of the leaseholders want to but it, which sadly means it will go on the open market and who knows what will happen then for the leaseholders.

Ramblings - your answer made me laugh out loud! But yes, I guess being a freeholder would give you a lot of inside knowledge, and it's encouraging to know that there are good freeholders out there. However, I'm sorry to hear about your leaseholders - I think they're mad, personally, for the reason you state, but on the other hand maybe they just don't have the cash.

CeibaTree - as I was reading through your post I was wondering how on earth you managed to get it so cheap then saw the end of your post. Fair enough, and it prob would have cost you at least double privately.

Lonelycrab - it sounds like a big project that was probably pretty expensive overall after the lease extension and refurb etc. I hope it's paid off for you, or will do!

Thanks to everyone for your advice - I'm learning so much here!