How Much Does A Lease Extension Cost? - By: Tim Bishop

There are different websites around that offer online calculators so that help you work out roughly how much a lease extension will cost you. Nevertheless, it is not always a good idea to rely upon these online workings out for anything other than a generic indication of how much it may cost you to have a lease extension. This is merely because there are so many factors that need to be taken into account.

The cost of a leasehold extension is composed of 3 separate parts. The first and second aspects rely on exactly what the landlord demands as they are dependent on the compensation you will have to pay. The compensation is made from two different amounts, firstly the amount of money the landlord will lose by not having access to his freehold interest and secondly the loss of ground rent he will also suffer.

You must also be aware that any lease which has less than 80 years left to run will incur the additional charge of 'marriage value'. This will make your lease extension a lot more expensive, the amount is worked out using the value of your property pre-extension and how much it is worth afterwards, it works out the loss the landlord is suffering due to losing his freehold interest. This marriage value can have a serious effect on the cost of an extension and can make it a lot more expensive. This extra charge often deters many leaseholders from getting an extension.

Therefore in knowing this information you can see that if your lease has 30 or 40 years left to run it is going to cost this additional marriage value and therefore be quite costly. However around 60 years plus the cost will be more reasonable and 80 years plus quite low. The longer you have to run on your lease, the less costly your extension will be.

As well as these costs, you will need to use an expert surveyor in order to get a valuation on your lease. On top of this you will need to seek advice from a specialist lawyer, which will cost you legal fees. You must however make sure that you are appointing a lease extension specialist as most everyday solicitors will not have the right sort of experience. You must also pay out for the landlord's legal fees. So even though the compensation is the greatest cost, you will have to be aware of all the other fees so that you can estimate the real cost of the extension.

About the Author

If you are thinking of Lease Extension, contact Bonallack & Bishop, a firm experienced in Leasehold Extension. Senior Partner Tim Bishop is responsible for all major strategic decisions, seeing himself as a businessman who owns a law firm. Tim has expanded the firm by 1000% in 12 years and has plans for its continued development.

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