09 Jul 21 by Rebecca Cook
Lease extension valuation
For many, one of the drawbacks of owning a flat or a maisonette on a long leasehold basis, is the concern the value reduces over time as the length of the lease decreases. Under the Leasehold Reform Housing and Urban Development Act 1993, long leaseholders (tenants) have the right to extend their lease. The law gives qualifying tenants the right to extend their lease by 90 years, in addition to the unexpired term they already enjoy, at a ‘peppercorn’ rent; this means there is no ground rent to pay.
Under the Act, the Landlord is entitled to receive a premium which is made up of potentially three elements; some Landlords and Tenants prefer to negotiate the lease extension on their own terms, meaning they can agree whatever terms they decide. If an agreement cannot be reached, the statutory route is started by the service of the Tenant’s notice (Section 42 notice) and then follows a prescribed route.
Vickery Holman have an expert team of Chartered Surveyors who specialise in this more complex area of valuation. As well as providing general advice, we will provide a ‘best and worse’ case lease extension valuation, as a guide to the possible outcome of negotiations. We will also negotiate the premium payable and other terms of the lease, and where required, represent at tribunal. If you are considering extending your lease or have been served notice by your Tenant, please contact a member of our team to discuss.
To be a qualifying leaseholder, you must have owned your property/long lease for 2 years and the original lease term must have exceeded 21 years when it was originally granted.
To look at our Valuation page, please click here.