If you own a leasehold property, extending the lease is a crucial step to maintain its value and protect your investment. A short lease can affect your property’s saleability, make it harder to secure a mortgage, and reduce its value over time. In this guide, we'll explain how to extend a leasehold property. We address how long it takes and discuss when it might be better to purchase the freehold instead.
What is the lease extension process?
Extending a lease involves a structured process, whether you choose the statutory route or negotiate directly with the freeholder. Below is a step-by-step guide to help you navigate the process:
1. Determine your eligibility
Before starting the lease extension procedure, check if you qualify for the statutory route:
You must have owned the property for at least two years.
The lease must be a long lease (originally granted for over 21 years).
If you don’t meet these criteria, you’ll need to follow the voluntary route (more on that later) and negotiate directly with your freeholder.
2. Instruct a surveyor for a valuation
Hire a qualified surveyor to determine how much it will cost to extend the lease. The surveyor will calculate the premium (the fee) based on factors like:
The remaining years on the lease
The property’s current market value
The ground rent you pay
A professional valuation ensures you have an accurate figure to negotiate from. preventing you from overpaying.
3. Appoint a solicitor
A property solicitor will guide you through the legal side of extending your lease. Their role includes:
Serving formal notices (if using the statutory process)
Reviewing and negotiating lease terms with the freeholder
Ensuring all legal deadlines are met
While not legally required, hiring a solicitor ensures the process runs smoothly and avoids costly errors.
4. Serve a Section 42 notice (statutory route)
If you are following the statutory lease extension process, your solicitor will serve a Section 42 notice on the freeholder. This notice outlines:
Your intention to extend the lease.
The premium you are offering (based on your surveyor’s valuation).
The freeholder has two months to respond with a Section 45 counter-notice, accepting or disputing your offer.
5. Negotiate the premium and terms
Once the freeholder responds, you enter the negotiation phase. If the freeholder disputes your valuation, your surveyor will negotiate on your behalf to agree on a fair premium.
Statutory route: The freeholder can propose a counter-offer. If no agreement is reached within six months, you can apply to the First-tier Tribunal (Property Chamber) for a decision.
Voluntary route: Negotiations are informal, and the freeholder has the freedom to set terms or refuse the extension.
6. Agree on terms and sign the new lease
Once both parties agree on the premium and any revised lease terms, your lease extension solicitor will prepare the legal documents. Key tasks include:
Drafting the lease extension agreement.
Ensuring the lease includes favourable terms (e.g., ground rent is set to zero in statutory extensions).
Arranging for the freeholder and leaseholder to sign the new lease.
7. Register the new lease with the Land Registry
If your property is registered, your solicitor will file the updated lease with the Land Registry. This is a legal requirement, as it updates the property title to reflect the new lease terms.
How long does it take to extend a lease?
The length of time to extend a lease depends on whether you follow the statutory or voluntary process:
Statutory lease extension process
Formal notice served: The process starts when you serve a Section 42 notice to the freeholder.
Response time: The freeholder has two months to respond with a Section 45 counter-notice, accepting or disputing the terms.
Negotiations: If the premium is disputed, both parties negotiate the cost. This can take a further two to six months.
Resolution: If no agreement is reached, the case can go to the First-tier Tribunal for a decision. This grants an extension.
On average, the statutory lease extension process takes 6-12 months to complete.
Voluntary lease extension process
The voluntary process can be quicker because there are no strict legal timelines. It usually depends on how responsive your freeholder is. However, the freeholder is not legally required to extend the lease, and negotiations can sometimes drag on. An average voluntary lease extension takes 3-6 months.
What is a voluntary lease extension?
A voluntary lease extension is when you negotiate with your freeholder outside the statutory process. While this option offers greater flexibility, it also comes with certain risks.
Pros ✅ | Cons ❌ |
|---|---|
Faster process with no formal legal timelines | The freeholder isn’t obliged to agree |
Can reduce legal and professional fees | The freeholder can charge higher premiums and include unfavourable terms (e.g. increased ground rent) |
Can reduce legal and professional fees | You lose legal protections provided under the statutory route |
How could the Leasehold Reform affect you?
The UK government has been working on reforms to improve fairness for leaseholders. Some of the proposed changes include:
Zero ground rent: New leases may have zero ground rent to reduce financial burdens.
Simplified lease extensions: The reforms aim to make lease extensions cheaper and easier.
Abolishing marriage value: Currently, leaseholders pay marriage value if their lease drops below 80 years. Proposed reforms would eliminate this cost.
These changes, expected as part of the Leasehold and Freehold Reform Act, could significantly benefit leaseholders by making the process more affordable and accessible. While these reforms are not yet law, they are expected to take effect in the coming years. Learn more in our guide to the leasehold extension reform.
Should you buy your freehold instead?
If you’re considering extending your lease, you might wonder if buying the freehold is a better option. Here’s a quick comparison:
Lease extension | Buying the freehold |
|---|---|
Adds 90 years (flats) or 50 years (houses) to the lease. | You gain full ownership of the property and land. |
Eliminates ground rent (statutory extension). | You no longer pay ground rent or service charges. |
You still have a leasehold agreement with the freeholder. | You have greater control over your property. |
Buying the freehold can be more expensive upfront. This is especially true for buildings requiring collective enfranchisement. On the plus side, owning the freehold eliminates leasehold issues and may add value to your property.
Do you need a solicitor for extending a lease?
While hiring a solicitor for the lease extension process is not a legal requirement, professional advice is strongly recommended. A solicitor can:
Serve the correct legal notices (e.g. Section 42 notice)
Review and negotiate the lease terms with the freeholder
Ensure you meet all legal deadlines and requirements
Solicitors experienced in leasehold law can help you avoid costly mistakes during complex negotiations, or help when you need to apply to the First-tier Tribunal for a resolution.
FAQs
Can a freeholder refuse to extend a lease?
If you follow the statutory lease extension process, the freeholder cannot refuse as long as you meet the eligibility criteria:
You have owned the property for at least two years.
You hold a long lease (originally granted for more than 21 years).
In a voluntary lease extension, the freeholder can refuse or set unfavourable terms, as there is no legal obligation to agree.
What happens if my lease drops below 80 years?
If your lease has fewer than 80 years remaining, you’ll face additional costs due to marriage value. Marriage value reflects the added property value when the lease is extended and must be paid to the freeholder. To avoid this, it’s best to start the lease extension process before the lease term drops below 80 years. Learn more in our guide ‘is a 100-year lease long enough?’.
How much does it cost to extend a lease?
The cost of extending a lease depends on several factors:
Property value: A higher property value typically results in a higher premium.
Lease length: Shorter leases cost more to extend.
Ground rent: Future ground rent payments are factored into the cost.
Professional fees, including solicitor and surveyor costs, will also add to the total amount.
Do you need to use a surveyor for a lease extension?
Hiring a surveyor is crucial for obtaining an accurate valuation of the lease extension premium. Surveyors use specific methods to calculate the cost, which helps you negotiate with the freeholder and ensures you don’t overpay.
Final thoughts
The leasehold extension process is a central step to protect the value of your leasehold property. Extending a lease also ensures it remains mortgageable and saleable. Understanding the process, costs, and timelines of a lease extension is key to deciding which route to take. You may choose the statutory route for greater protection, or negotiate a voluntary extension.
Extending a lease can be costly and time-consuming. Starting early, before the lease drops below 80 years, can save you money, and prevent expenses like marriage value. Hiring professionals such as solicitors and surveyors ensures everything runs smoothly. Property professionals also protect your interests throughout.