Oxford City Council does not issue voluntary lease extensions nor give an indication as to price.
Leaseholders may have a statutory right to acquire a lease extension once the lease has been held for two years.
Why would a lease extension be required?
A lease with fewer than 80 years left before its term comes to an end is likely to be more expensive to extend and harder to sell or mortgage.
How do I apply?
You would need to appoint a solicitor and valuer to submit a formal and valid notice under section 42 of the Leasehold Reform Housing and Urban Development Act 1993. In the notice you would propose a price for the lease extension.
This is to be submitted to the Home Ownership Officer by email landlordservices@oxford.gov.uk or by post to Home Ownership Officer Services SA 2.6, Oxford City Council, Town Hall, St Aldates, Oxford , OX1 1BX
It is recommended you take legal advice or valuation advice about the operation of the Act
What costs are payable?
You will need to pay your own legal and professional fees
You will also have to pay our fees which will include the:
- costs of employing a valuer
- legal costs of dealing with a valid notice and responding, and drafting and completing the lease
There may be further costs if your notice is invalid, you ask to change other terms of your lease, your lease is defective or has pages missing, or if you sell your lease during the application.
You will also have to pay a premium to the Council for the new, extended lease. We cannot say what that premium might be – you will need valuation advice. Please go check the calculator on the Lease Advice website for an indication.
You will be liable for our reasonable, professional fees from the date you serve the formal notice, whether or not your application is successful.
How long will the lease be extended for under the current legislation?
The Lease can be extended by 90 years. For example: if your lease was granted for 125 years but 40 years have gone by since it was granted, you will have an “unexpired term” of 85 years. Extending your lease will bring it to 175 years unexpired.
Will service charges and ground rent still be payable after the lease extension is granted?
The ground rent of £10.00 per year that you pay will come to an end.
You will still have to pay service charges covering the charges set out in your lease e.g. buildings insurance.
Will the terms of the lease change?
The new lease will be identical to your existing lease. apart from minor modifications and certain exclusions and additions that are allowed by law. e.g. modifications to take account of any alterations to the flat, or the building, since the existing lease was granted (for example, to gas lighting or coal stores), or to correct a problem with the lease.
Full details of exclusions and additions allowed by law can be provided by your solicitor.
How long will the process take?
A lease extension can take between four months and one year to complete – depending on the leaseholder’s wishes.
We cannot advise on solicitors or valuers whom leaseholders can contact but we can guide you in the direction of an association of professionals that deal with lease extensions
Whilst lease extensions can take differing times there are strict time-limits:
- you must give us at least two months to respond to your section 42 notice with a counter-notice
- if we were to agree to your proposal in your section 42 notice (or you agreed to our counter-notice proposal), the lease would have to complete within four months of the date of agreement of the premium and the contents of the lease
- you are entitled to apply to tribunal if there is a dispute on the lease terms or the premium - you must make that application within six months of our counter-notice - if you do not apply, your claim ends and you cannot make another one for one year
- few cases ever involve a tribunal hearing where a judge decides the lease terms and the premium - it is not often cost-effective for parties to argue at tribunal
- the timings will be influenced greatly by your solicitor and valuer – and also your instructions to them. The Council will do what it is required to do as quickly as possible. Please be aware that the Council has internal processes that must be followed in order to ensure both compliances with the law and proper accountability for decisions relating to the sale of public assets
Further information on the lease renewal process can be obtained from an independent body called the Leasehold Advisory Service.
Impending changes to legislation
In November 2023 the Government introduced the Leasehold and Freehold Reform Bill (the Bill) to Parliament, signalling a significant change to the system of residential property ownership in the UK.
The Bill is making its way through Parliament and has cross party support. It seeks to amend the Leasehold Reform Act 1967 (the 1967 Act) and the Leasehold Reform, Housing and Urban Development Act 1993 (the 1993 Act), to extend tenant rights.
The Bill introduces wide ranging reforms to both the 1967 and 1993 Act which the Government claims will promote 'fairness and transparency' for leaseholders.
The Bill introduces the following key changes as regards lease extensions:
- Under the current provisions of the 1993 Act, the maximum term which can be granted in a lease extension claim is 50 years for houses and 99 years for flats. However, the Bill increases this to 990 years for both
- The Bill introduces a new methodology for valuing the premium payable to the freeholder in exchange for the extension. This new method will no longer take account of marriage value and adjusts how ground rents are to be taken into account in the valuation. Whilst the specifics of this new valuation method will need to be reviewed by experts in the field, it is clear that, once the Bill comes into force, it will result in reduced premiums for tenants to pay in order to extend their leases
The Bill also makes some significant procedural changes which are designed to facilitate claims for tenants, in particular:
- The current requirement that a tenant must have owned the lease of their property for at least 2 years before they are able to extend or enfranchise will be abolished
- Tenants will no longer be required to pay the landlord's costs of the extension or enfranchisement claim by default except in limited circumstances
- Jurisdiction to decide certain matters under the 1967 Act and the 1993 Act will be transferred from the Court to the Tribunal
Progress of the Bill
You can follow the progress of the bill on the UK Parliament website.
We recommend that if you are considering extending your lease prior to this potential legislation becoming law, that you seek legal advice.
