There are several benefits of extending your lease. These include increasing the market value of your flat and making your flat more appealing to buyers and lenders.
There are also many advantages to the statutory lease extension process in particular. The Leasehold Reform and Urban Development Act 1993 entitles you to the following benefits:
Guaranteed lease extension: the Act entitles you to compel your landlord to grant you a lease extension. Unlike voluntary lease extensions, the landlord legally cannot refuse your request if you go down the statutory route.
Add an extra 90 years to your lease: whereas the terms of the new lease under an informal lease extension are open to negotiation, the statutory process guarantees the leaseholder fair, fixed terms. Foremost among these is the right to add 90 extra years to your lease, so if it currently has 79 years left to run it would have 169 after completion.
Never pay ground rent again: under the statutory route, the landlord has to waive their right to charge ground rent. Instead you will pay ‘peppercorn ground rent’, a nominal amount for which nothing will actually be charged.
Finally, there is also a compelling case to be made for extending your lease sooner rather than later. If your lease runs below 80 years, something called marriage value comes into force. This means that half the increase in the value of the property as a result of the lease extension is added to the premium. Letting your lease run below this crucial 80 year deadline therefore makes it exponentially more expensive to extend.
We therefore recommend extending your lease as soon as possible because the longer you leave it, the more expensive the lease extension becomes.