Lease Extension Services
Expert guidance through the lease extension process, helping you protect the value of your property and secure long-term peace of mind.
When Should You Extend Your Lease?
If you own a leasehold flat, the length of your remaining lease has a direct impact on your property's value, your ability to sell, and your mortgage options. As a lease gets shorter, the property becomes less valuable and harder to finance. Most mortgage lenders require a minimum lease length of 70 to 80 years, and properties with short leases can be significantly discounted on the open market.
The critical threshold to be aware of is 80 years. 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 value that results from extending the lease, and the freeholder is entitled to a share of this increase. Extending before you reach this threshold can save you thousands of pounds.
At Block, we advise leaseholders to consider extending their lease as early as possible. Even if your lease has many years remaining, starting the process sooner means lower costs and a smoother transaction. Our team can help you understand your options and guide you through every step of the lease extension process.
The Lease Extension Process
Extending a lease follows a structured legal process. While it can seem complex, having the right professional support makes it straightforward. Here is how the statutory lease extension process works:
1. Obtain a professional valuation
A specialist leasehold valuation surveyor assesses the premium payable for the lease extension based on the current lease length, property value, and ground rent.
2. Serve a Section 42 notice
Your solicitor serves a formal notice on the freeholder setting out the terms of the extension you are seeking, including the proposed premium.
3. Freeholder responds with a counter-notice
The freeholder has two months to respond, either accepting your terms, proposing alternative terms, or raising objections.
4. Negotiate the premium
If the parties cannot agree on the premium, negotiations take place between the respective valuers. Most cases are resolved through negotiation.
5. Tribunal determination if needed
If agreement cannot be reached, either party can apply to the First-tier Tribunal for a determination of the premium payable.
6. Complete the new lease
Once terms are agreed or determined, solicitors complete the new lease, which is then registered at the Land Registry.
Lease Extension Costs
The total cost of a lease extension includes several elements. Understanding these upfront helps you budget effectively and avoid surprises:
- The premium paid to the freeholder, which is the main cost and varies depending on lease length, property value, and ground rent
- Your solicitor's legal fees for managing the process
- The freeholder's reasonable legal and valuation costs, which you are required to pay
- Your own valuation surveyor's fees for assessing the premium
- First-tier Tribunal fees if the matter proceeds to a hearing
- Land Registry fees for registering the new lease
A lease extension calculator can provide a rough estimate of the premium, but for an accurate figure you should instruct a specialist leasehold management valuation surveyor. The premium depends on complex calculations involving the current lease term, the capitalised value of the ground rent, and marriage value where applicable.
At Block, we can recommend experienced leasehold surveyors and solicitors to help you through the process efficiently and at a reasonable cost. Contact us for a free initial consultation.
New Lease Extension Laws
The Leasehold and Freehold Reform Act 2024 represents the most significant change to leasehold law in a generation. The Act introduces several reforms that will make lease extensions easier, cheaper, and more accessible for leaseholders:
These provisions are being implemented in stages. Our team stays fully up to date with legislative changes and will advise you on how the new laws affect your specific situation. Whether you are considering a lease extension now or waiting for further reforms, we can help you make an informed decision. For more on how these changes interact with your leaseholder rights, speak to our team today.
Frequently Asked Questions About Lease Extensions
How much does it cost to extend a lease?
The cost of extending a lease varies significantly depending on the current lease length, the property value, the ground rent payable, and the location. Key costs include the premium paid to the freeholder (which can range from a few thousand pounds to tens of thousands), professional valuation fees, legal fees for both sides, and any tribunal costs if agreement cannot be reached. A specialist lease extension calculator or surveyor can provide an estimate based on your specific circumstances.
When should I extend my lease?
It is generally advisable to extend your lease sooner rather than later, particularly before it drops below 80 years. Once a lease falls below 80 years, the cost of extending increases significantly because "marriage value" becomes payable. This is an additional sum reflecting the increase in the property's value once the lease is extended. Starting the process well before the 80-year threshold can save you a substantial amount of money.
Can a freeholder refuse a lease extension?
If you meet the qualifying criteria for a statutory lease extension, the freeholder cannot refuse your application. Under the Leasehold Reform, Housing and Urban Development Act 1993, qualifying leaseholders have a legal right to extend their lease by 90 years at a peppercorn ground rent. The freeholder must comply, though they can challenge the premium offered if they believe it is too low. Disputes over the premium are resolved by the First-tier Tribunal.
What are the new lease extension laws?
The Leasehold and Freehold Reform Act 2024 introduced significant changes to lease extension rights. Key provisions include extending the standard extension term from 90 years to 990 years for both houses and flats, removing the requirement for leaseholders to have owned the property for two years before applying, and abolishing marriage value from the premium calculation. These reforms are being implemented in stages, and some provisions may not yet be in force.
How long does a lease extension take?
A statutory lease extension typically takes between six and twelve months to complete, though it can take longer if there are disputes over the premium. The process involves serving an initial notice on the freeholder, allowing two months for a counter-notice, then negotiating or applying to the tribunal if agreement cannot be reached. An informal or voluntary extension negotiated directly with the freeholder may be quicker but does not carry the same statutory protections.
Considering a Lease Extension?
Speak to our team for expert advice on the lease extension process, costs, and your options. Free initial consultation with no obligation.