A well-thought-out extension can transform your leasehold property into a more functional and aesthetically pleasing space. There may be other benefits to additional living space: enhanced property value, and potentially better functionality.
For example, if you own a ground floor flat, you might be able to extend into your garden.
While the initial outlay can be significant, a wisely planned addition to or reconfiguration of space can considerably enhance the property's market value.
However, compared to freehold properties, where you own the land the building sits on, extending or renovating a leasehold property can be more complicated.
The complexities of leasehold properties
Leasehold properties come with their unique sets of rules, set out in the lease agreement and known as covenants. Of these, restrictive covenants are those that prevent you from doing certain things.
Often, freeholder consent is required before any significant alterations, such as building an extension, can commence.
Plan before you extend
Check your lease for restrictions
Checking your lease is the first step before considering any form of structural alterations.
You need to know whether there are any covenants restricting certain types of alterations to the property or whether you require consent for changes from the freeholder.
Engage an architect to develop a feasible project
An experienced architect can help you develop a suitable plan for your property extension. They bring creativity, expertise, and a keen understanding of what may feasibly work within the boundaries of your lease.
Initial planning work doesn't have to be expensive, and can open the doors to ideas that you may not have considered.
Your extension plan should ideally meet both your immediate needs for additional space and long-term considerations for property value.
Consult a structural engineer
A structural engineer’s role is to make sure that the proposed extension aligns with safety standards. They are experts in assessing the impact of the extension on the property's structural walls and external walls, ensuring the project will not compromise the building's structural integrity.
If you use an architect, they are likely to recommend a structural engineer.
Secure the necessary permissions and consents
Most leases require leaseholders to obtain the prior consent of the freeholder before making substantial modifications to your leasehold property. This standard clause is designed to protect the freeholder's interests.
If you are obliged to do so, but don't, you'll be in breach of your lease, and the freeholder may seek damages or apply to court to force you to return your property to its original state at your cost.
Obtaining freeholder consent involves obtaining a licence to alter (also called a licence for alterations or LTA for short), which is a formal agreement between you and the freeholder detailing the proposed work.
When applying for an LTA, you may be asked to pay reasonable costs that the landlord incurs, including legal fees for both parties and expenses associated with reviewing your proposals, such as for a surveyor.
Be prepared to negotiate with the freeholder and potentially other leaseholders. You may need to provide more detail about your plans, make alterations to them, or agree to additional terms to gain approval of everyone affected.
A licence, when granted, may be subject to other terms, such as the works meeting a certain quality standard or being carried out in a certain way. The freeholder may reserve the right to inspect the works to be assured that everything is done correctly.
The law is equally designed to safeguard leaseholders from unwarranted restrictions. The Landlord and Tenant Act 1927, Section 19(2) stipulates that a freeholder cannot 'unreasonably withhold consent'. This means that a freeholder cannot reject your construction proposal without valid grounds.
For instance, if your proposed extension does not jeopardise the structural integrity of the property or significantly depreciate its value, withholding consent may be deemed unreasonable.
Obtaining approval is often easier said than done, and so, it's often best to engage a solicitor experienced in leasehold property law to seek permission on your behalf.
If you own a share of freehold, also known as commonhold, its likely that you will still need official freeholder consent.
Complying with local authority requirements: planning permission and building regulations
Besides freeholder consent, you may need to secure planning permission. You will need to follow building regulations to ensure your extension is lawful and safe.
Permission from your local authority may not be required for all extension projects, but it's wise to confirm this before swinging a sledgehammer.
Because the UK planning process can be intricate, gaining some familiarity with it is advantageous.
The first step involves submitting an application to your local planning authority. The authority then reviews your proposal, considering factors such as environmental impact, whether the property is in a conservation area and consistency with local development plans. Afterwards, they either grant or deny your application.
Certain minor improvements may fall under permitted development rights, meaning they do not require planning permission. These are projects that can be carried out without explicit planning permission due to their negligible impact on the surrounding environment. Yet, always confirm with your local planning authority if your project qualifies as a permitted development.
If your project doesn't fall under permitted development, consider that with creativity from your architect, you may be able to pivot from a project that does require permission to one that doesn't, without compromising too much on your aims.
Walls keep people in and people out. You're likely to want a good relationship with your neighbours, but if you don't have one, at least you won't want it to deteriorate. Their lives may also be affected by your project.
Extending a leasehold property can affect shared walls or boundaries, termed as party walls. When alterations involve a wall shared with your neighbour's property, you must serve notice to them under the Party Wall etc. Act 1996.
If your neighbours consent to the works, the construction can proceed. If they dissent, a Party Wall Award may be necessary to resolve the dispute. This is a contract that outlines the work, responsibilities, and any compensation for potential damage, protecting the interests of both sides should any damage occur during the building work.
Financial and practical considerations
After securing the necessary permissions and consents, focus shifts to the practicalities of the work. Building an extension involves not only bricks and mortar but also time, effort, and funds.
You'll need to budget for costs for materials, architect and legal fees for securing consents and permissions, and potentially higher service charges due to increased property value.
Construction phase: keep your property structurally sound throughout
Ensuring the structural integrity of your property while works go on is paramount. If walls or floors become unstable, you'll potentially face enormous bills.
Employ a qualified structural engineer who can assess the impact of the extension on the overall integrity of the property.
Alternative extensions: cellars, lofts and ceilings
Before embarking on a full-scale extension, consider the potential of your loft space. A cellar or loft conversion can be a cost-effective way to gain additional space without expanding your property's footprint.
Another possibility might be to lower ceilings to increase the usable footprint.
Often, the ultimate goal of building an extension is not just to create additional space but to add value to your property and enhance your living conditions.
Extra space, particularly in desirable locations, can significantly boost your property's market value. You'll receive a higher price when it's time to sell or remortgage your property.
For that, consider that costs you pay now will be recovered in the future. Diligent planning and adherence to all necessary regulations are essential to ensure long-term use and value.
Ask for professional guidance, be it from a solicitor, an architect, or a structural engineer, as this may reduce risk, save time and ultimately save cost.
And finally, remember to maintain good communication with other leaseholders throughout the process to ensure a harmonious co-existence.