Extending House Lease
Extending the lease of a house. Owners of leasehold houses are able to extend their lease in much the same way that the owners of leasehold flats are able to extend their leases.
Most owners of leasehold houses will prefer to purchase the freehold rather than extend their lease but there may be good reasons why that is not possible or is undesirable.
The holder of a lease in a house is entitled to an extension of 50 years beyond the end of the current lease.
The leaseholder must give written notice to the landlord of his or her intention to extend the lease and will be responsible for the landlord’s reasonable costs incurred in investigating the leaseholder’s entitlement to extend the lease, obtaining a valuation for the purpose of fixing the new rent to be paid and preparing and entering into the new lease.
The new lease is to be granted on the same terms as the old save for any changes to the property or to amalgamate the terms where the new lease derives from a combination of several previous leases.
There will also be a new rent. This is required by law to be the amount for which the landlord could let out the land—ignoring the value of any buildings on the land.
The rent is to be calculated based on the letting value at the time the new lease is to commence.
After 25 years of the new term have elapsed the landlord can opt to have the rent recalculated based on the letting value at that time. If the landlord wishes to do that, the landlord must give the leaseholder notice during the course of the 25th year.
The new rent will generally be significantly higher than any ground rent that was payable under the old lease.
If the old lease required the landlord to provide repairs or other services but did not require the leaseholder to contribute or to contribute a fixed amount, the new lease will require the leaseholder to contribute a fair proportion of the costs.
For those reasons the new lease may involve significantly more costs for the leaseholder than the old and that is probably why many leaseholders in that situation prefer to buy the freehold instead and do away with the landlord entirely.
If you are interested in either extending your lease or buying the freehold, please contact us.