Lease Extensions for Tenants

Leases are commonly known as a diminishing asset. This means that the lease term gradually shortens as time goes on. Leases with less than 80 years may be difficult to sell or to secure a mortgage on. It is therefore important to extend the lease either by agreement, or by serving notice, well before this point to safeguard the value of your property.

How to extend your lease?

Voluntary Extension

If you have an agreement with your Freeholder then the process is straightforward. We can help you record this or negotiate it as necessary before arranging registration at the Land Registry.

Statutory Extension

The Leasehold Reform, Housing and Urban Development Act 1993 (as amended) enables tenants to extend their lease by 90 years in addition to the current unexpired term at a nil ground rent (£0), in return for paying the Freeholder a premium.

In order to qualify for this process the flat must be held under a long residential lease (i.e. originally granted for a term of more than 21 years) and the flat must have been owned for more than 2 years.

This process involves serving a S.42 Notice upon the Freeholder setting out basic details about the flat and the premium you would be willing to pay for the extension.

The Freeholder then has the right to respond with a Counter-Notice setting out what terms they propose or if they don’t believe that you have the right to an extension.

This is typically followed by a period of negotiation and if an agreement cannot be reached the matter can be referred to the First-tier Tribunal (Property Chamber) to make a ruling.

How much does it cost to extend your lease?

After serving the S.42 Notice you are responsible for the Freeholder’s costs. These will include their legal costs and any surveyor’s costs. Upon service of the S.42 Notice the Freeholder may also ask for 10% of the premium or £250.

The size of the premium depends upon the value of your flat and the remaining term of your lease. The shorter the lease the higher the premium will be. If the lease has less than 80 years remaining an additional uplift called “Marriage Value” is added.

The Lease Extension Calculator from Lease Advice

If you instruct a solicitor you will be responsible for their costs as well.

How we can help?

Our commitment to our clients is to achieve the best outcome reasonably possible in the shortest amount of time. As we are a firm that specialises in property law, we have the necessary experience to deal with the complexities of the lease extension process and to keep you fully informed as it progresses.


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