City of London Lease Extensions

Life in The City of London:

The City of London, widely referred to simply as ‘the City’ or the ‘Square Mile’, is known as the financial hub of London. It is not categorised as a London Borough but as a county and a government district.

The area has been a centre for settlement, trade, commerce and ceremony since the Roman period when it was known as ‘Londinium’, and it was in these 1.12 square miles from which the rest of London developed.

Although dominated by the prosperous business sector, there are numerous residential pockets. Largely, the properties consist of flats and apartments in low and high-rise blocks, which will likely be sold under a leasehold agreement.

• Population of The City of London: The City has unique demographics. Only 8,600 people live in the area, even though there are an estimated 500,000 daily workers here! This data is pulled from the Office for National Statistics Census 2021.
• Average House Price: Statistics from Rightmove showed that properties in the City Of London had an overall average price of £1,024,218 over the last year.
• Wards in The City of London: Aldersgate, Aldgate, Bassishaw, Billingsgate, Bishopsgate, Bread Street, Bridge and Bridge Without, Broad Street, Candlewick, Castle Baynard, Cheap, Coleman Street, Cordwainer, Cornhill, Cripplegate, Dowgate, Farringdon Within, Farringdon Without, Langbourn, Lime Street, Portsoken, Queenhithe, Tower, Vintry, Walbrook.
• Local Authority: The local authority of The City of London is The City of London Corporation.

Lease Extension Regulations in the City of London

Leaseholders in the City of London have a statutory right to extend their lease by an additional 90 years. There are two pathways to gaining a lease extension: the informal (voluntary) route and the formal (statutory) route.

One of the most populated areas is the Barbican Estate. The 40-acre Estate is home to over 4,000 residents living in over 2,014 flats. Most Barbican long leases commenced in July 1981 and were granted for 125-year terms. As these leases approach the 80-year mark, extending them becomes increasingly expensive, so it’s worth considering extending your lease before it hits this milestone.

The City of London Corporation advises that leaseholders contact the Barbican Estate Office for an application form and discuss an informal lease extension to minimise costs. This information is located on the ‘Barbican Estate other charges’ page of their website.

We recommend taking the statutory route if you have owned your property for at least two years. It offers significant security under the Leasehold Reform, Housing and Urban Development Act 1993.

The Lease Extension Company has executed many successful statutory lease extensions in and around London. We will provide a professional surveyor and experienced solicitor to deliver the cheapest premium and the fairest lease terms for your property. Please see our case studies to review the outcomes we’ve achieved for our clients.

The Lease Extension Process

Look below for an overview of the statutory lease extension procedure.

• Eligibility Check
• Valuation
• Serving the Section 42 Notice
• Receipt of the Section 45 Counter Offer
• Negotiation
• Agreement of Terms
• Registration of your new lease

For further details, please visit our ‘How Long Will My Lease Take?’ article for more information about each step.

Serving the Section 42 Tenant’s Notice

Before your Section 42 notice is drafted, one of our firms of specialist chartered surveyors will value your property for the purpose of the lease extension and identify the likely ‘premium’ (the price of your lease extension) you will pay your freeholder.

Identifying Your Competent Landlord

Our specialist solicitors will also identify the ‘competent landlord’ whose interest in the property is long enough to grant your 90-year lease extension.

Sometimes, this will be the direct landlord or housing management to whom you pay your service charge or ground rent. However, the competent landlord is often the freeholder of the building.

The Leasehold Reform Housing and Urban Development Act 1993 requires leaseholders to serve a Tenant’s Notice (Section 42 notice) on the ‘competent landlord’.

The Section 42 notice commences the lease extension and must include specific legal information. This is a technical legal notice, and it must be correctly drafted and validated to ensure your lease extension is deemed valid.

At The Lease Extension Company, we work with specialist legal firms in this specific area of law, ensuring that your notice is drafted and reviewed by leading experts in this field. The Section 42 notice will be sent to you for approval before it is forwarded to the solicitors, who will serve the notice to the Freeholder on your behalf.

Are you aware of who your Freeholder is? See below for the leading landlords in The City of London.

Key Freeholders in The City of London:

The main freeholder of the small amount of residential properties in The City of London, such as Middlesex Street Estate and Golden Lane Estate, is The City of London Corporation. The Corporation owns 2,859 homes in the Square Mile.

Interestingly, the corporation also manages ten other estates in six London boroughs. The full list of estates is cited on their ‘Housing Estates’ webpage.

Finding Your Freeholder:

Your freeholder’s contact information is listed in your original lease document. If you do not have your lease document, you can request a copy from the HM Land Registry for a small fee. As a LEC client, we can arrange this on your behalf.

How Much Will Your Lease Extension Cost?

Lease extension premiums vary from property to property because they are based on individual factors, including the following:

• The value of your property.
• The amount of ground rent and how much it increases over time.
• The number of years remaining on your lease.

Costs can also depend on the route to obtain your lease extension.

• Informal Lease Extensions: Costs are determined and agreed upon directly with your freeholder.
• Statutory Lease Extensions: You are responsible for the valuation and legal costs of both you and your freeholder, plus the premium for the additional years on your lease.

If you’re curious about your expenses, use our handy Lease Extension Calculator to estimate your premium.

About The Lease Extension Company’s Fixed Fee Service

At The Lease Extension Company, we take a fuss-free approach to this complex area of property law.

We’ll develop a detailed plan covering all stages, legal requirements and expected costs, which we combine into a simple fixed fee so you know what to expect from the beginning.

You’ll also receive the guidance of an experienced surveyor and solicitor to ensure you’re not paying a penny more for your premium than necessary.

Partner with the LEC for Quality London Lease Extensions

Our legal expertise and local knowledge of your area means we can negotiate the fairest premium and lease extension for your property.

If you’d like to get the ball rolling, get a quote or arrange a free consultation with our team by filling out our online form, calling us on 0800 098 2770 or emailing [email protected].