Cost of Lease Extension
Guidance on How to Renew Your Lease
When it comes to extending your lease, the timing needs to be just right for you to reap the maximum financial benefit. A remortgage is likely to be impossible if your flat’s lease has less than 60 years remaining. If your lease is already approaching the 80-year point, it’s definitely time to consider a lease extension. Of course, every situation is unique, so it’s a good idea to consult with an impartial, qualified professional to get the advice that fits your particular circumstances.
Extending your lease could significantly increase your property’s value. It could also result in securing 90 years with no ground rent.
What is Rent Review?
When does your rent change? The property market situation is one of the major factors influencing the outcome of a commercial rent review, a landlord has a better chance of getting higher rents in a bustling property market, but a property market that is not as vibrant gives tenants a better chance of securing lower rents. Of course, location, the condition of the property, and the strength of the tenant’s business can all be important factors in the mix.
Calculate the extra cost for extending your Manchester Lease.
If you’re considering whether to extend your leasehold, an extension calculator for Manchester can provide not only the current amount but the projected amounts for the future. These calculators, though, work best when you know some details about your specific leasehold. You can get an idea of the potential cost and the factors that might impact it.
You can use a free online lease extension calculator to come up with an estimate figure for the cost of the extension. However, you will need professional help and advice, and you need to go to a solicitor for proper guidance. You also need a surveyor who knows who can value the flat and tell you what it is worth now and what it is likely to be worth in the near future.
Procedure for Extending Leases in a Formal Way
In case you wish to extend your lease and choose to negotiate formally, both you and your landlord must adhere to specific procedures and strict time frames. These are laid out in the Leasehold Reform, Housing and Urban Development Act 1993, and they exist to safeguard your legal rights. However, if you choose to engage in informal negotiations, you need not observe any of these guidelines.
Costs of Lease Extension
The total price of your lease extension will primarily be dictated by the lease terms, the duration of the extension, and the size and location of the home. Although, the total also includes a variety of other charges that you really ought to account for when you assess whether extending the lease is cost-effective. Among these are:
- Marriage value: marriage value is added to the cost of extending a lease when the remaining term is below 80 years. Ordinarily, the later you extend your lease, the more it will cost you. The marriage fee is essentially half of the value added to the property when the lease is extended. Therefore, if the remaining term is getting close to 80 years, extend the lease before you hit that milestone, and you’ll avoid the marriage fee, which can be quite significant.
- Money Owed to Landlord: when estimating the overall amount you will have to pay to extend your lease, don’t forget to add in the charges that your landlord will incur for which you will be responsible. This includes what your landlord will have to pay to his or her solicitor and surveyor, provided those costs are reasonable.
- Payment for damages: if the extended lease causes a reduction in the value of the landlord’s interest or any unfettered interest in adjoining property, you may have to pay for damages that replace the landlord’s lost value. You usually won’t have to pay because the landlord is still in control of the property and maintains the freehold, but you could be liable for damages if the landlord has lost development potential. Again, consult a professional for advice on the circumstances in which you might incur that risk.
Entitlement of Leaseholders to Prolong a Manchester Lease
If you are a tenant under the Leasehold Reform, Housing and Urban Development Act 1993, you can use this law to renew your lease. You have to have been in residence for more than two years, and your lease can not have gone out of date, but if you meet these conditions, you can apply to add 90 years to the remainder of your lease.
When to Serve Notice on the Freeholder?
If you want to inform the landlord, the best course of action is to hire a solicitor who is experienced in leasehold enfranchisement. You would want to serve this notice in a timely fashion as the costs increase significantly if the remaining term of the lease falls below 80 years.
Brief Overview
If you are a leasehold owner in Manchester or the Home Counties and are contemplating renewing your lease, you need to consider the consequences for property value and mortgageability. The right you have to this is created by the rules of the Leasehold Reform, Housing and Urban Development Act 1993.
As a leaseholder, you have the legal right to extend your lease for an additional 90 years, provided you’ve owned the property for at least 2 years, and your lease hasn’t expired. If you meet these criteria, your landlord cannot refuse to extend the lease. However, calculating the cost of the extension is quite complicated. It involves the annual ground rent, the remaining term of the lease, and the property’s market value. To navigate this process, you will need the assistance of a chartered surveyor. Not only will they help determine the property’s current value, but they will also inform you of the significant premium you will have to pay to extend your lease.
You can attempt to secure an extension to your lease by talking to your freeholder. Once you’ve got the conversation started, try to agree on a cost for the extension.
Surveys of Commercial Property
If you’re thinking of acquiring, leasing, subletting, disposing of, or altering commercial premises in Manchester, you would be well advised to locate a surveyor skilled in the nuances of commercial building surveying – should you spot a defect in a commercial building you can use that information to negotiate an asking price for the property that’s considerably lower than what the seller originally wanted, or you can talk your way out of a bad deal altogether.
Our Manchester-based team of RICS-compliant commercial building surveyors is equipped to handle matters throughout Manchester.
Contact
Our team prioritizes client care above all else. We look forward to being in touch with you so you can instruct a surveyor in Manchester, London, Bristol, Birmingham or Cardiff. You can reach out to us easily. Just fill out our form, and we’ll get back to you with a free quote for your survey. All our surveyors are qualified as members of the Royal Institution of Chartered Surveyors (RICS) and we are one of the UK’s leading providers of building survey and valuation services:
- Accredited Professionals: Certified by organizations like RICS, CIOB, and RPSA.
- Customized Survey Reports: inspections to meet your specific requirements.
- Local Expertise: Deep understanding and specialized knowledge.
- Expert Guidance: Professional recommendations and support.
The property survey you commission will be carried out by an accredited professional. Your chartered surveyor will be a member of the Royal Institution of Chartered Surveyors (RICS) or the Chartered Institute of Building (CIOB), or will belong to some other industry-standard professional body. Rest assured; you will receive highest quality of professional service for your survey.
