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As we drive our marketing campaign on lease extensions forward, Large & Gibson contemplates the legal technicalities in flat ownership

  • How to preserve the value of your flat

If you are a flat owner, you are likely to be faced with a myriad of different issues.

Even more important than the repairing obligations, consent to alterations and service charge provisions; the term of your leasehold interest. The longer you have owned your flat, the shorter your lease term gets and the value of your flat decreases.

  • How many years do you have left on your lease?

Any lease term shorter than 80 years will be difficult to get a mortgage over and your flat will become much more difficult to sell. Some lenders will only lend where there is at least 99 or even 125 years on the lease term!

If you are thinking of re-mortgaging or selling, or just want to preserve the value of your flat, then you definitely need to keep an eye on the lease term. The shorter the lease term, the more expensive it is to extend. It can involve paying a hefty premium to the freeholder, paying their legal and professional costs as well as your own. The very worst-case scenario would be that you have to take the freeholder to court if they are being extremely unreasonable or simply do not respond (very unlikely).

It can definitely be argued that the law behind owning a leasehold interest in a flat is unfair and it is indeed an area under great scrutiny by the courts. However, nothing has been implemented and the archaic legal principles remain.

If the length of your leasehold interest (the lease term) is approaching to 80 years and beyond, and you are keen to preserve the value of it, you should take steps to extend it to ensure that it doesn’t attract “the marriage value” which means that you are obliged to pay the freeholder half of the increase in value that comes with extending the lease term. Ascertaining the value of your flat ownership is complicated and requires inspection by a qualified surveyor.

  • How can you extend the term of your lease and preserve the value of your flat?

There are two different routes that you can take to specifically extend the term of your leasehold interest:

You may be able to agree an informal lease extension with the freeholder. However, the closer to the 80-year point, the more likely the freeholder is to demand unreasonable terms including a high premium, high ground rent, and/or high service charges, all because of the technicalities behind extending a leasehold interest.

If you have owned your flat for at least 2 years (from the date that your ownership is registered at the Land Registry), and there are at least 21 years remaining on your lease term, you can apply for a formal lease extension under LHRDUA 1993. Once granted, a formal lease extension will guarantee an additional 90 years on top of your current lease term, plus a peppercorn ground rent (nothing) and other reasonable terms. You should note that there are strict timings involved under the formal lease extension procedure, and it can be a long and expensive process.

For an evaluation of your leasehold ownership in your flat, please contact Amy Howard at Large & Gibson in the commercial/property litigation team on 02392 296 296 or via email on

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