Lease Extension Guide for UK Leaseholders
Everything you need to know about the lease extension process, from understanding costs and using a lease extension calculator to navigating the lease extension new law reforms. Protect the value of your home with expert guidance.
Why Should You Extend Your Lease?
If you own a leasehold flat, the remaining length of your lease has a direct and significant impact on your property's market value, your ability to sell, and your mortgage options. As a lease gets shorter, the property becomes harder to finance and less attractive to buyers. Most mortgage lenders require a minimum lease length of 70 to 80 years, and properties with short leases can be discounted by 10 to 30 percent or more on the open market.
A lease extension restores the full value of your property by adding decades to the term. It removes the uncertainty of a diminishing asset and gives you long-term security of tenure. Whether you plan to stay in your home or sell in the future, extending your lease is one of the most important financial decisions you can make as a leaseholder.
At Block, we advise leaseholders across our managed portfolio to consider extending their lease as early as possible. Our team can explain your options and connect you with specialist solicitors and surveyors. Learn more about your entitlements on our leaseholder rights page.
The 80-Year Threshold and Marriage Value
The critical milestone every leaseholder should know about is the 80-year mark. Once your lease drops below 80 years remaining, the cost of a lease extension increases substantially because an additional element called “marriage value” becomes payable. Marriage value represents the uplift in the property's market value that results from the extension, and the freeholder is entitled to claim 50 percent of this increase.
To illustrate how much this matters, consider a flat worth two hundred and fifty thousand pounds. With 85 years remaining, the premium might be around eight thousand to twelve thousand pounds. Drop below 80 years and the same extension could cost twenty thousand pounds or more. This is why many people search for a flat lease extension calculator to understand the financial impact before their lease reaches this threshold.
If you are wondering how much does it cost to extend a lease by 90 years, the answer depends heavily on whether your lease is above or below this 80-year line. Acting early saves significant money. Our lease extension services team can advise you on the optimal timing for your situation.
Statutory vs Informal Lease Extension
There are two main routes to extending your lease: the statutory route and the informal (voluntary) route. Understanding the difference is essential for choosing the approach that best protects your interests.
Statutory Lease Extension
- Legal right under the 1993 Act for qualifying leaseholders
- Adds 90 years to the current lease term (990 years under new law)
- Ground rent reduced to a peppercorn (zero)
- Freeholder cannot refuse a valid claim
- Premium determined by statutory formula
- Disputes resolved by the First-tier Tribunal
Informal Lease Extension
- Negotiated directly with the freeholder
- No statutory framework or fixed formula
- Terms are entirely at the freeholder's discretion
- May be quicker if the freeholder is willing
- Ground rent may not be reduced to zero
- No right of appeal to the tribunal
We generally recommend the statutory route because it provides legal certainty and protects the leaseholder from unfavourable terms. However, in some circumstances an informal extension may be appropriate, particularly where the freeholder is cooperative and the terms offered are fair. Your solicitor and surveyor can advise on the best approach for your specific case.
The Lease Extension Process Step by Step
The formal lease extension process follows a structured legal procedure. While it involves several stages, having the right professional support makes it straightforward:
1. Obtain a specialist valuation
A leasehold valuation surveyor assesses the premium payable based on the current lease length, property value, ground rent, and whether marriage value applies. This is the foundation of your claim and informs the figure in your Section 42 notice.
2. Serve a Section 42 notice on the freeholder
Your solicitor serves a formal notice on the freeholder setting out the terms of the lease extension you are seeking, including the proposed premium. This is a legal document and must comply with strict requirements.
3. Freeholder responds with a counter-notice
The freeholder has two months to serve a counter-notice, either accepting your terms, proposing alternative terms, or raising objections to your eligibility.
4. Negotiate the premium
If the parties cannot agree on the premium, negotiations take place between the respective surveyors. The majority of lease extension cases are resolved through negotiation without the need for a tribunal hearing.
5. Apply to the First-tier Tribunal if needed
If agreement cannot be reached within six months of the counter-notice, either party can apply to the First-tier Tribunal for a determination of the premium payable. The tribunal's decision is binding.
6. Complete the new lease
Once the premium is agreed or determined, solicitors draw up the new lease, the premium is paid, and the extended lease is registered at the Land Registry. The process is then complete.
For more detail on how the First-tier Tribunal handles lease extension disputes, see our dedicated guide.
Lease Extension Cost Factors
Understanding the cost components of a lease extension helps you budget accurately. Many leaseholders search for a lease extension calculator UK tool online to get an initial estimate, and while these calculators can give a useful indication, the actual cost depends on a professional valuation. Here are the main cost factors:
- The premium paid to the freeholder, calculated using the capitalised value of the ground rent, the value of the reversion, and marriage value (if applicable)
- Ground rent capitalisation: the present value of the ground rent the freeholder will lose over the remaining lease term, using an appropriate capitalisation rate
- Marriage value: the increase in property value resulting from the extension, shared 50/50 with the freeholder (only applies when the lease is below 80 years)
- Your solicitor's legal fees for managing the statutory process and completing the new lease
- The freeholder's reasonable legal and valuation costs, which the leaseholder is required to pay under the 1993 Act
- Your own surveyor's fees for preparing the initial valuation and negotiating the premium
- Land Registry fees for registering the new extended lease
A lease extension calculator uses simplified assumptions and cannot account for the nuances of individual properties. For an accurate premium assessment, always instruct a qualified leasehold management surveyor with specific experience of lease extension valuations. The premium calculation involves discounting future ground rent payments and assessing the diminution in the freeholder's interest, both of which require specialist expertise.
At Block, we can recommend experienced leasehold surveyors and solicitors to guide you through the process efficiently and at a reasonable cost. Visit our lease extension services page or contact us for a free initial consultation.
Lease Extension New Law: The 2024 Reforms
The Leasehold and Freehold Reform Act 2024 represents the most significant change to the lease extension landscape in a generation. These lease extension new law provisions will make extensions easier, cheaper, and more accessible for leaseholders across England and Wales:
These provisions are being implemented in stages through secondary legislation. Some elements, such as the abolition of marriage value, may take time to come into force. Our team stays fully up to date with legislative changes and will advise you on whether it is better to proceed under the current rules or wait for specific reforms to take effect.
For a broader view of how these changes interact with your rights as a leaseholder, see our guides on leaseholder rights and collective enfranchisement. If you are considering purchasing the freehold as an alternative to extending, our team can explain both options.
The Role of the Managing Agent in Lease Extensions
While a managing agent does not directly handle the legal process of a lease extension, they play an important supporting role. A good managing agent will alert leaseholders when their lease is approaching critical thresholds, provide information about the process, and recommend reputable specialist solicitors and surveyors. They also liaise with the freeholder on practical matters and ensure that the building's records are up to date, which can be important during the valuation process.
At Block, we take a proactive approach to leasehold management. We monitor lease lengths across all the buildings we manage and flag potential issues before they become costly problems. Our lease extension support includes initial guidance, professional referrals, and coordination with the freeholder to ensure a smooth process.
If you are unsure whether your lease needs extending or want to understand the financial implications, speak to our team. We provide a free initial consultation with no obligation, and we can help you navigate every aspect of the lease extension process with confidence.
Frequently Asked Questions About Lease Extensions
How much does a lease extension cost?
The cost of a lease extension depends on several factors including the current lease length, the property value, the ground rent payable, and whether marriage value applies. Key costs include the premium paid to the freeholder, your solicitor's fees, the freeholder's reasonable legal and valuation costs (which you must pay), your own surveyor's fees, and any First-tier Tribunal fees if a dispute arises. For a flat worth two hundred and fifty thousand pounds with 75 years remaining, the premium alone could be fifteen thousand to twenty-five thousand pounds. A lease extension calculator can provide a rough estimate, but a specialist surveyor should be instructed for an accurate figure.
Can a landlord refuse a lease extension?
If you meet the qualifying criteria for a statutory lease extension under the Leasehold Reform, Housing and Urban Development Act 1993, the freeholder cannot refuse your application. You must have owned the property for at least two years (though this requirement is being removed under the Leasehold and Freehold Reform Act 2024) and hold a long lease originally granted for more than 21 years. The freeholder can challenge the premium you propose, but they cannot refuse the extension itself. Disputes over the premium are resolved by the First-tier Tribunal.
What is the 80 year rule for lease extensions?
The 80-year rule refers to the critical threshold at which lease extension costs increase significantly. When a lease drops below 80 years remaining, an additional element called marriage value becomes payable as part of the premium. Marriage value represents the increase in the property's value that results from extending the lease, and the freeholder is entitled to a share of this uplift. Extending before the lease falls below 80 years can save thousands of pounds. The Leasehold and Freehold Reform Act 2024 abolishes marriage value entirely, though this provision may not yet be in force.
How long does the lease extension process take?
A statutory lease extension typically takes between six and twelve months to complete. The process involves obtaining a valuation, serving a Section 42 notice on the freeholder, waiting two months for a counter-notice, negotiating the premium, and completing the new lease. If the premium cannot be agreed, either party can apply to the First-tier Tribunal, which can add several months. An informal or voluntary extension negotiated directly with the freeholder may be quicker but does not carry the same statutory protections.
Will leasehold be abolished in the UK?
The government has expressed a long-term ambition to replace leasehold with commonhold for new-build flats, but leasehold is not being abolished in the immediate future. The Leasehold and Freehold Reform Act 2024 bans new leasehold houses and introduces significant reforms to make lease extensions cheaper and easier, but the leasehold system for existing flats will continue. Commonhold has been available since 2004 and has seen almost no take-up. In the meantime, leaseholders should focus on exercising their existing rights, including extending their lease while reforms are phased in.
What are the new lease extension laws?
The Leasehold and Freehold Reform Act 2024 introduces major changes to lease extension rights. Key provisions include extending the standard extension term from 90 years to 990 years for both houses and flats, abolishing marriage value from the premium calculation, removing the two-year ownership requirement so new owners can extend immediately, reducing ground rent on extended leases to a peppercorn, and introducing a simplified valuation methodology. These reforms are being implemented in stages, and some provisions may not yet be in force.
Ready to Extend Your Lease?
Our experienced team can guide you through the lease extension process, explain the costs, and connect you with specialist professionals. Free initial consultation with no obligation.