Extending the lease on a house
Although extending the lease of a leasehold house is perfectly possible (under the Leasehold Reform Act 1967), unsurprisingly this particular right is hardly ever used – for the simple reason that buying the freehold of a house (a process often referred to as enfranchisement) is usually much more attractive.
Why is the lease extension of a house so unusual?
There are broadly 5 reasons;
- Unlike extending the lease on a flat, the formal or statutory lease extension of a house increases the term of the existing lease by only 50 years – instead of 90 years
- The most common problems associated with jointly buying the freehold of a residential leasehold block (i.e. getting a sufficient number of leaseholders to participate in the freehold purchase process, and working with those leaseholders in managing the building subsequently) simply don’t apply when you exercise your right to buy the freehold of a house – for the simple reason that there will only be one leaseholder, although of course you might jointly own the lease with a spouse or other family member.
- Not every leasehold house is eligible for lease extension – the house itself must fall within certain rateable values and needs to satisfy a low rent test
- Unlike the lease extension of a residential flat (where a leaseholder retains the right to compel the freeholder to grant a further lease extension), a leaseholder does not have the right to extend the lease on a house on the second occasion – but can buy the freehold
- The total cost of buying the freehold of a house (once you include the premium, and any legal or valuation costs incurred by both the leaseholder and freeholder) is often little more than the cost of extending the lease by a mere 50 years.
And that’s why the vast majority of long leaseholders, once they realise why freehold purchase is so much more attractive, go down that route.
Find out more about how to buy the freehold of your house
Simply click here to visit the page on our website about buying the freehold of your house
Your House – freehold purchase or lease extension – we can help
Whether you own the lease on a long leasehold house and are looking to extend the lease or buy the freehold, our specialist team can help.
The team does nothing but freehold purchase and lease extension work for both freeholder and leaseholder clients throughout England and Wales.
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