Extending your lease


Why should I extend my lease?

Extending a short lease to a decent length can add thousands to your property’s value. Generally, the shorter the lease, the lower the value.

Full leaseholders (not shared owners) have a statutory right to a lease extension. However, we encourage leaseholders to follow the informal route as it’s much quicker and cheaper.

If you’d like to go down the formal route, you should seek independent advice. See the Leasehold Advisory Service’s website for more details.
 

When does a lease become ‘short’?

Once the remaining time on your lease drops below 80 years, it makes it more difficult for you to sell or remortgage.
 

Image: Lease holdersWhen’s the best time to extend my lease?

If you extend your lease when it gets to around 83 - 85 years, you’ll save a lot of money.

After your lease drops to 80 years or less, you’ll have to pay 50% of the flat’s ‘marriage value’ on top of the usual lease extension price.
 

What’s the ‘marriage value’?

It’s the amount of extra value a lease extension would add to your property.
 

How long can I extend my lease by?

We’ll extend your lease by a further 90 years. For example, if your lease has 80 years remaining, the extension would give you a lease of 170 years.
 

How much will it cost me to extend my lease?

At the start…

  • VALUATION FEE – costs vary, but expect to pay at least £400. The valuation must be done by a Royal Institution of Chartered Surveyors (RICS) accredited surveyor.

  • OUR ADMIN FEE – £210 (incl. VAT)

Through your solicitor, further down the line…

PREMIUM – the total of:

  • The estimated financial loss to the landlord (Optivo) resulting from the loss of reversion of the property (entitlement to the property at the end of the existing lease)

  • 50% of the marriage value (if the lease has 80 years or less remaining)

  • Any compensation payable in relation to any other loss or damage arising from the lease extension.

  •  

YOUR SOLICITOR’S FEES – you’ll need a solicitor to act on your behalf. Get a few quotes from reputable solicitors experienced in dealing with lease extensions. You could use one of our approved solicitors.

OUR LEGAL FEES – around £650 + VAT.

You may also have to pay:

  • Stamp Duty (if the extension price is more than £125,000)

  • Freeholder’s valuation, legal, and admin fees (if Optivo isn’t the freeholder).

Is there any reason you wouldn’t let me extend my lease?

  • If you’re in breach of your lease (e.g. for arrears, anti-social behaviour, or serious disrepair issues): We’ll discuss the circumstances with you, but we may not agree to the lease extension while you’re still in breach of your lease.

  • If we’re not the freeholder of your home: It’ll depend on the terms and length of our head lease. We may need to agree an extension with the freeholder; your costs will be higher if this is the case.

 

I’m a shared owner. Can I extend my lease?

Yes. We’ll base the premium on 100% of your home’s value; not just the share you own.

What do I do now?

  1. Have a look at the Leasehold Advisory Service’s lease extension calculator for an estimate of the premium

  2. Instruct a RICS accredited surveyor to do a lease extension valuation, and ask them to send it directly to us. Have a look at our list of approved RICS surveyors.
    Make sure you ask for a LEASE EXTENSION VALUATION, not a valuation for sale.

  3. Complete our online Lease Extension form.


Complete our Lease extension form

What’s the process?

  1. Valuation (you instruct this)

  2. Our calculation of the premium (if this is very different to your valuation, we’ll try to agree the premium with you)

  3. We confirm the premium in writing

  4. You sign and return our form confirming you want to go ahead

  5. You pay our admin fee

  6. Our solicitor does the legal paperwork and liaises with your solicitor throughout

  7. Lease extension completes.
In total, it should take around three months to complete your lease extension informally.

 

Want to find out more?

Contact us or have a look at our Lease Extension Policy for more information.