The Lease Extension Process and Proposed Reforms
Current law and proposed reforms
The introduction of the Leasehold and Freehold Reform Act 2024 (LAFRA) is set to bring significant changes for leaseholders and property owners across England and Wales. The Act increases the statutory lease extension term from 90 years to 990 years, abolishes marriage value, and ensures that all extended leases carry only a peppercorn (£0) ground rent. In addition, the Government has proposed introducing a £250 per annum cap on ground rent for existing leases. This cap is intended to protect leaseholders who still pay ground rent under historic leases that predate the Leasehold Reform (Ground Rent) Act 2022. The proposal has not yet come into force, but once implemented, it will apply only to existing leases that continue to attract ground rent, ensuring no leaseholder pays more than £250 annually. New or extended leases will continue to be restricted to a peppercorn (£0) ground rent. Once the Act comes into force, it is expected to impact the overall cost of extending a lease, potentially making the process more affordable for many leaseholders.
If you need an estimate of legal fees and likely third‑party costs, use our Instant Lease Extension Quote Calculator. Our calculator can give you a guide price within seconds, providing you with the confidence and information to start your lease extension process.
How the lease extension process works
Completing the lease extension process increases your property’s value and chances of a buyer obtaining a mortgage – however, it is vital to extend your lease at the right time in order to avoid high fees or trouble selling your leasehold property.
Our lease extension solicitors are here to explain the legal process in full and if you need an estimate of costs for your lease extension. Try our lease extension calculator.
Formal vs informal extensions — what’s the difference?
A formal (statutory) extension under the 1993 Act follows a fixed legal process and timetable, produces a new lease adding 90 years, and sets ground rent to a peppercorn for the extended term. Valuation is determined under statutory assumptions, and disputes can be referred to the First‑tier Tribunal (Property Chamber). An informal (voluntary) extension is negotiated directly with the freeholder outside the statute. It can be quicker and allows wider lease modernisation, but there is no statutory timetable or valuation framework; the freeholder can seek onerous terms (including rent reviews) unless resisted. Informal structures must be documented carefully: a replacement lease (surrender and regrant) will generally engage the 2022 ground‑rent rules (peppercorn for most new “regulated” long residential leases), while a pure variation may leave the existing rent in place unless expressly amended.
Background
Almost all leaseholders of flats have the right to extend their lease under the Leasehold Reform, Housing and Urban Development Act 1993, subject to the statutory qualification criteria and exclusions. The previous requirement to have owned the flat for at least two years has now been abolished, meaning eligible leaseholders can generally commence a statutory claim immediately after purchase. There is a lease extension process that you must follow and strict timescales to be followed by both sides.
How much value does a lease extension add?
This will depend on how many years you are extending your lease by, but generally speaking you can expect to see an increase of at least 10% of your property’s value.
How does a Statutory Lease Extension work?
The 1993 Leasehold Reform Act gives you the right to extend your lease for an additional 90 years with no ground rent payable for the remaining term of the lease. The main qualifying criteria is that you must be a qualifying tenant, and you must have a ‘long lease’ i.e. one originally granted more than 21 years.
The first stage in the lease extension process is for you to serve a Section 42 Notice on the landlord, which is an opening offer for the extension of the lease. However, first you need to obtain an up-to-date valuation of your property. This is because the formula in the Leasehold Reform Act 1993 calculates the premium based on the value of the leasehold property and number of years remaining on its term.
Please be aware that you need to add legal fees to your calculation and that you are liable for your landlord’s legal costs as well as your own. Those costs must be ‘reasonable’, but the bills will be coming to you. If you add £1500 – £2000 to the baseline cost you will get an estimated figure. However, it is important to note that costs vary significantly depending on the landlord, managing agents, valuation issues and whether Tribunal proceedings are required, and larger blocks or complex titles can increase time and cost.
You also need to find who the ‘competent landlord’ is, i.e. the person capable of granting you the lease extension. It’s likely to be the landlord specified on your ground rent demands, but there may be other intermediate leases between you and the landlord or other complications. The competent landlord is the person to whom you’ll send the Section 42 Notice.
With the above information, your solicitor will be able to prepare the Section 42 Notice and send it to the competent landlord. At Starck Uberoi Solicitors, our experienced Conveyancing lawyers will deal with your matter quickly and efficiently.
Landlord’s Counter Notice
The landlord has 2 months to respond to the Section 42 Notice, but will possibly get in touch with you before then, either to request more information or to ask for access to the flat to do his own valuation. Any correspondence must be responded to within 21 days and this rule applies to both sides.
Your Landlord may not welcome the application to extend your lease, particularly if you are ahead of the game; from a landlords’ point of view, leasehold extensions are far more profitable on leases with less than 80 years to run i.e. where the landlord is entitled to receive a marriage value as part of the premium. While it’s unlikely that your landlord will indulge in any malpractice in this regard, you should be aware that he will thoroughly scrutinise any application where no marriage fee is involved and may look for grounds to delay or object to it. This means that your Section 42 Notice needs to be watertight.
The landlord will reply to the Section 42 with a Counter Notice. The most likely outcome is that he will acknowledge your right to extend, but disagree with the premium on offer, asking for a figure 30-50% higher. Hopefully, a compromise can be reached within a few weeks.
How does an informal (voluntary) lease extension work?
An informal extension is negotiated directly with the freeholder outside the 1993 Act and follows a commercial sequence rather than a statutory timetable. Typically, the leaseholder first obtains specialist valuation advice to benchmark a sensible premium, then approaches the freeholder (or managing agent) to agree heads of terms covering the added term, the ground‑rent position, any premium, each party’s costs, and the target timetable.
The legal structure must then be fixed: if the deal is a replacement lease (a surrender and regrant), the Leasehold Reform (Ground Rent) Act 2022 will generally require a peppercorn ground rent for most new “regulated” long residential leases; if it is documented as a pure variation of the existing lease, the existing rent can persist unless expressly amended. Lender consent is usually required where the flat is mortgaged, and terms must be lender‑acceptable (for example, peppercorn rent or a modest, fixed arrangement—no aggressive reviews or disguised recurring charges). Your solicitor will draft and negotiate the paperwork (either a new lease or a deed of variation), coordinate any management company approvals, agree execution, deal with SDLT analysis (if a premium or debt assumption applies), and complete post‑completion steps (Land Registry applications and leasehold notices).
Unlike the statutory route, there is no guaranteed timetable or valuation framework, so price and process depend on negotiation—and it is essential to ensure the documentation is compliant, the rent provisions are unambiguous, and the outcome is acceptable to future buyers and lenders.
When should I apply for a lease extension?
You should apply for a lease extension while your lease has more than 80 years remaining on its term. This is because extending a lease that has less than 80 years to run incurs an additional fee to be paid to the landlord called a Marriage Fee.
When a Lease is extended, it adds value to the property, sometimes this can be a substantial amount. Under the 1993 Leasehold Reform Act, the landlord is entitled to half of the increase in the value of the property when a less than 80-year lease is extended. This is called the Marriage value or Marriage fee, so-called because the value of the property + longer Lease (i.e. when married together) exceed the combined value of the separate entities. When you extend a lease with a remaining term of 80 years or more, no marriage fee is payable. You should always look to extend a lease before it hits the 80-year mark for this reason.
How much does it cost to extend my lease?
Here is a short breakdown of some of the fees that are likely to be payable as part of the lease extension process:
- The lease extension premium: The leaseholder will usually need to pay a premium to the freeholder for the lease extension, which is calculated by valuation methodology and statutory assumptions set out in the 1993 Leasehold Reform Act. The premium will be assessed by specialist valuers dependent on the value of the property and the number of years currently remaining on it. Our lease extension calculator will help with the calculations.
- Legal fees: Unless otherwise agreed, the leaseholder will be responsible for paying both their own and the freeholder’s legal fees in connection with the lease extension. Call our team on 020 8840 6640 for a quote today.
- Surveyor’s Fees: Although you can obtain a lease extension without a surveyors valuation, it is highly recommended to seek a valuation of your property from a chartered surveyor to ensure the premium you pay is fair.
- Land Registry fees: Once your lease extension has completed, you will need to register the extended lease with the land registry, for which there will be a fee. The fee will depend on the price of the property, but will usually be no more than £300.
Wondering how to finance your lease extension? Take a look at our blog post for information on your options.
How long does it take to extend a lease?
Generally speaking, once you and your freeholder have agreed on the amount of the premium to be paid, the entire process can take roughly eight to twelve weeks to complete.
However, the Land Registry is still facing a significant backlog at the time of writing so it may take longer for your lease extension to be registered. To avoid the risk of incurring a Marriage Fee, call our team on 020 8840 6640 to get started today.
Do leaseholders still have to pay Ground Rent?
Not if you extend your lease via the statutory route described above. A statutory lease extension reduces the ground rent payable to a “peppercorn” rate (practically zero). Additionally, following the Leasehold Reform (Ground Rent) Act 2022, all new leases granted after 30th June 2022 are generally restricted to a peppercorn ground rent in most new regulated long residential leases.
Can you negotiate a lease extension premium?
When taking the statutory lease extension route, you cannot negotiate the premium payable, as the premium will be calculated as per the formula included in the Leasehold Reform Act 1993.
However, you can try to negotiate an informal lease extension with your freeholder. An informal lease extension may also be a way to extend your lease if you do not meet the requirements for a statutory lease extension. However, your freeholder is under no legal obligation to grant you an informal lease extension nor to accept the premium you offer, regardless of whether or not you meet the criteria for a statutory lease extension. For further information and guidance on how to negotiate your Lease Extension, read our blog on How to negotiate a lease extension
Can you be denied a lease extension?
As long as you meet the criteria for a statutory lease extension (which are that you must be a qualifying tenant and the lease must have originally been granted for a term of at least 21 years), your freeholder generally cannot deny your right to extend your lease. The only ground on which they could refuse a lease extension would be if they can prove they have plans to develop the site.
If your freeholder refuses to grant you a lease extension on unfair grounds or if they try to discourage you by demanding an unreasonable premium, you could consider taking your freeholder to a First-Tier Property Tribunal, where the tribunal will decide on the premium payable. Our solicitors can advise you on taking your freeholder to a tribunal and, should you decide to proceed, provide legal representation and advice every step of the way.
Should I extend my lease before selling?
It is a good idea to start the lease extension process first, but you don’t need to wait until the lease extension is completed before finding a buyer. You can begin the process yourself by serving notice onto your freeholder, then assigning the benefit of the section 42 notice onto the buyer, so that they can complete the lease extension themselves once contracts have been exchanged before the property sale completes. This saves you time and money, as the buyer will generally pay the premium for the lease extension plus the freeholder’s legal fees. Find out more in our blog post.
How do you extend your lease if you own a share of the freehold?
The lease extension process for share of freehold properties can be done by agreement between the co‑freeholders (often at a nominal or no premium) using a deed of surrender and regrant/replacement lease, or by using the statutory route if agreement is not reached. Proper documentation and lender consent are essential.
Do I need a solicitor to extend my lease?
You will need a leasehold solicitor to ensure that your lease extension is being granted on fair terms, draft the necessary documentation and the register the extended lease at the Land Registry on your behalf.
At Starck Uberoi, we have a specific lease extension team with broad experience in a wide range of leasehold matters, who can complete your lease extension with ease. We coordinate valuation, serve and respond to notices within deadlines, negotiate robustly on premium and terms, obtain lender/managing‑agent consents, complete and register the new lease, and manage post‑completion notices so the extended term and peppercorn rent are properly protected on title.
How Starck Uberoi Solicitors can help
Starck Uberoi’s leasehold solicitors will provide you with an experienced and efficient leasehold extension service, helping you to either process an agreed extension or negotiate with the freeholder. We take a proactive approach to ensure your lease extension is completed as efficiently as possible without sacrificing the quality of service we provide.
To book an appointment, please call 02 8840 6640 email solicitor@starckuberoi.co.uk.
Our Offices
Our Brentford solicitors, are located on the High Street in a grand three-story building, just a short distance from Brentford County Court. Our Belgravia solicitors are located Just a 5 minute walk from Victoria tube station in Grosvenor Gardens. Our Ealing solicitors are only a short walk from both Ealing Broadway and South Ealing and our Richmond solicitors have the pleasure of overlooking the picturesque Richmond Green. Finally our solicitors in Canterbury are located in the within the UNESCO World Heritage Site of Canterbury Cathedral. Our partner, Raminder Uberoi, can also provide a Notary Public Service at any of our London offices.
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ALEP
We are proud to be Members of the Association of Leasehold Enfranchisement Practitioners (ALEP). ALEP Members are vetted to ensure that they have the requisite expertise in leasehold enfranchisement. ALEP acts as a badge of assurance and confirms that we can handle potentially complex collective enfranchisement transactions.
