Lease Extension Advice

What Is a Lease Extension?

When you own a leasehold flat, you do not own the building itself. You own the right to live in the flat for the number of years remaining on your lease. A lease extension adds more years to that lease, typically extending it by 90 years on top of whatever remains. This is done through a legal process with your freeholder.

A longer lease means a more valuable flat, easier mortgage options for future buyers, and lower ground rent (which is often reduced to zero, or a "peppercorn").

The 80-Year Threshold

This is the most important number in leasehold property. Once your lease drops below 80 years, a concept called "marriage value" kicks in. This means your freeholder is entitled to a share of the increase in value that the extension creates, making the extension significantly more expensive.

Statutory vs Informal Extension

Statutory extension (Section 42)

This is the formal legal route. You have the legal right to extend your lease by 90 years at a peppercorn (zero) ground rent, with no minimum ownership period (the previous two-year requirement was removed in January 2025). The process involves serving a Section 42 notice on your freeholder and negotiating the premium. If you cannot agree, the matter can be decided by the First-tier Tribunal.

Informal extension

You can also approach your freeholder directly and negotiate a lease extension outside the statutory process. This can be quicker and simpler, but you have less legal protection. The freeholder is under no obligation to agree, and the terms may not be as favourable. An informal extension may also not reduce the ground rent to zero.

The Section 42 Process

1. Qualify - The flat must be held on a long lease (originally granted for more than 21 years). Since 31 January 2025, there is no longer a minimum ownership period before you can serve notice.
2. Get a valuation - Instruct a specialist surveyor to value the premium. This typically costs £500-£1,000.
3. Serve the notice - Your solicitor serves a Section 42 notice on the freeholder, stating the premium you are offering. You will need a solicitor experienced in leasehold law. Expect to pay £1,000-£2,000 for legal costs.
4. Counter-notice - The freeholder has two months to respond with a counter-notice, usually proposing a higher premium.
5. Negotiate - Your surveyor and the freeholder's surveyor negotiate the premium. Most cases settle without going to tribunal.
6. Complete - Once the premium is agreed, the extension is completed through solicitors. You also need to pay your freeholder's reasonable legal and valuation costs.

The whole process typically takes 6-12 months. For more detail, see the Government's leasehold guidance.

How Much Does It Cost?

The cost of a lease extension depends on several factors:

• The premium - Paid to the freeholder. This is the biggest cost and varies enormously depending on the flat's value and remaining lease length.
• Your solicitor - Typically £1,000-£2,000.
• Your surveyor - Typically £500-£1,000.
• Freeholder's costs - You must pay the freeholder's reasonable legal and surveyor fees, often another £1,000-£2,000.
• Tribunal fees - Only if negotiations fail and you go to tribunal. Fees are relatively modest (a few hundred pounds) but you may also face additional professional costs.

Use our lease extension calculator for a rough estimate of the premium based on your flat's details.

Leasehold Reform Act

The UK Government has been working on reforms to leasehold law. The Leasehold and Freehold Reform Act 2024 received Royal Assent in May 2024, but many of its provisions are not yet in force and are subject to further secondary legislation.

Key changes include:

• Removal of the two-year ownership requirement - now in force since 31 January 2025. You can now serve a Section 42 notice immediately after purchasing your flat
• Removal of the marriage value requirement (potentially making extensions cheaper for leases under 80 years) - not yet in force, expected late 2026 at the earliest
• A standard calculation method for premiums - not yet in force
• Capping ground rents on existing leases - not yet in force

Apart from the two-year rule removal, most provisions are not yet in force. We recommend not waiting for reforms if your lease is running down, as the timeline for implementation remains uncertain. For the latest updates, see RICS leasehold reform guidance.

Extend or Sell?

This depends on your circumstances. Extending makes sense if you plan to stay in the flat long-term or want to maximise the sale price on the open market. Selling to us makes sense if:

• You need to sell quickly and cannot wait 6-12 months for an extension
• The cost of extending is more than you can afford or want to spend
• You do not want the hassle and uncertainty of the extension process
• Your lease is very short (under 50 years) and the extension would be very expensive

Read our full guide on selling options compared.