Extending a Lease
Lease Extensions: Why Extend Your Lease?
If you own a leasehold property, it’s essential to understand precisely what that means. You may own your flat for the duration of the lease, but not the building itself or the land it stands on. Once your lease expires, ownership of the property reverts to the freeholder. For this reason, most leases are extended well before reaching expiry. Unlike freehold ownership, which is indefinite, leasehold ownership is time-limited, making lease extensions a crucial consideration for anyone seeking to protect their investment.
There are several compelling reasons to extend your lease. One of the most significant is protecting, and even enhancing, the value of your property. A lease approaching 80 years or fewer will lose value quickly and become harder to sell. Buyers are often wary of short leases due to the costs and complications associated with extending them, while many mortgage lenders simply won’t finance homes with short lease terms.
Extending your lease doesn’t just preserve the value of your property; it also makes remortgaging more straightforward. Many lenders now require a minimum of 85 years remaining on a lease to approve a mortgage. By extending, you safeguard your property’s value, maintain its appeal to potential buyers, and keep your financing options open.
Key Entitlements
The Leasehold Reform, Housing and Urban Development Act 1993 grants most flat owners a statutory right to extend their lease by 90 years at a fair market rate.
A statutory lease extension reduces your ground rent to a “peppercorn rent” (essentially zero) and keeps the same terms as your current lease, giving you long-term security and continuity.
There’s no one-size-fits-all figure. The cost of extending a lease depends on several factors, including:
- The property’s market value
- The remaining lease term
- The level of ground rent
On top of the premium payable to the freeholder, you’ll need to budget for professional fees, including your lawyer’s costs and valuations for both sides. As a guide, expect to spend at least £5,000.
Marriage value refers to the increase in a property’s value when a lease is extended, particularly when the remaining term is less than 80 years. A longer lease is generally more appealing to buyers and lenders, leading to this added value.
This increase is assessed and typically split equally between the leaseholder and the landlord. However, if a lease has more than 80 years remaining, marriage value does not apply, as it is considered secure. Leaseholders should carefully consider their lease length when planning for an extension, as it can significantly impact costs.
Lease Extension Options
The statutory route provides a structured, legally protected process for extending your lease. Provided you meet the qualifying criteria, you’re entitled to add 90 years to your lease term and reduce ground rent to zero.
Informal Lease Extensions
Alternatively, you can negotiate directly with your freeholder. While this might seem quicker, the freeholder has the freedom to alter the lease terms, sometimes unfavourably. Seeking professional advice ensures the agreement is fair and your rights are protected.
Leasehold vs Freehold Considerations
Understanding the difference between leasehold and freehold is essential. With freehold, you own both the property and the land indefinitely. With a leasehold, you only own the right to occupy the property for the length of your lease. Extending your lease helps bridge that gap, providing greater security for the future.
The Process of Extending a Lease
Negotiation is often a key part of the process. Having an experienced lawyer on your side ensures your interests are adequately represented and that the agreed price reflects the actual value of the extension.
Steps to Take
- Appoint a lawyer who specialises in leasehold reform.
- Instruct a surveyor to carry out a valuation and establish a fair price.
- Make a formal offer via your lawyer to the freeholder.
- Pay a deposit if requested.
- Finalise and sign the new lease agreement.
Even if your landlord is absent or unknown, you still have options. The courts can step in to protect your rights and enable the extension process to move forward.
A lease with fewer than 80 years remaining can be challenging to sell or remortgage, and costs escalate quickly due to marriage value. Acting early can save you significant expense and stress.
It’s a common myth that lease extensions are always prohibitively expensive. In reality, costs vary widely depending on your circumstances. Another misconception is that you can wait until the lease is nearly expired—but extending earlier is usually far more cost-effective.
How We Can Help
Our specialist lawyers guide clients through every stage of the lease extension process. We’re transparent about costs, explain your options clearly, and protect your interests in negotiations with landlords.
Our legal fees for straightforward lease extensions start from £1,950 + VAT—a competitive, cost-effective way to secure peace of mind and protect the value of your home. With decades of experience in property law, we combine technical expertise with a supportive, straightforward approach.
Whether you’re extending proactively or dealing with a short lease under pressure, we’ll ensure you achieve the fairest possible outcome.
Our Accreditations
