General information

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This page provides general information about statutory lease extensions for residential leasehold flats in England and Wales. It is not legal advice and should not be relied on as a substitute for advice on your own lease, title, mortgage position or valuation. Leasehold law is technical and is also changing. Before serving a formal notice, agreeing informal terms with a landlord, or paying any money on account, we recommend taking advice from a solicitor and a specialist lease extension valuer.

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How long should your lease be?

We are often asked what length of lease is considered “acceptable” and whether ground rent terms should be a concern. The answer depends on your circumstances, particularly whether you intend to sell, remortgage or keep the property long term. However, there are some important thresholds to be aware of.

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More than 80 years remaining

Taking advice before the lease falls to 80 years can be important.

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Under the current statutory rules, marriage value can become payable once the lease has 80 years or less remaining at the date the formal notice is served. Marriage value is the additional value created by extending the lease, and it can significantly increase the premium payable to the landlord.

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Even where a lease still has more than 80 years remaining, a buyer may be cautious if the term is already in the low or mid-80s. They may be concerned that the lease will fall below 80 years during their ownership, making it more expensive to extend later.

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80 years or less remaining

If your lease has 80 years or less remaining, it is important to take advice promptly. The shorter the lease becomes, the more the premium is likely to increase.

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A short lease can also affect the value of the flat, the number of potential buyers and the ability to obtain mortgage finance.

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Fewer than 70 years remaining

Many mortgage lenders are cautious about lending on flats with shorter leases. Lending criteria vary between lenders, but a lease with fewer than around 70 years remaining can make a flat harder to mortgage and therefore harder to sell.

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Some lenders may still consider the property, but they may require the lease to be extended before completion, impose stricter conditions or offer less favourable terms.

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Your statutory right to extend your lease

Qualifying leaseholders of flats have a statutory right to extend their lease under the Leasehold Reform, Housing and Urban Development Act 1993, as amended.

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At present, a successful statutory lease extension for a qualifying flat gives:

• an additional 90 years on top of the existing unexpired term; and

• ground rent reduced to a peppercorn, which means effectively nil.

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For example, if your lease has 70 years remaining, the statutory route would normally result in a new lease of 160 years, with ground rent reduced to a peppercorn.

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This statutory right is an individual right. You do not need other leaseholders in the building to extend their leases at the same time.

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The two-year ownership rule has changed

Previously, leaseholders usually had to own their flat for at least two years before they could start a statutory lease extension claim.

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That rule has now been removed. From 31 January 2025, a qualifying leaseholder can start the formal lease extension process as soon as they are the registered owner of the flat.

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You do not need to have lived in the property. The key issue is whether you are a qualifying leaseholder with a qualifying lease.

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Formal and informal lease extensions

There are two main ways to extend a lease: the formal statutory route and an informal agreement with the landlord.

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The formal statutory route

The formal route begins by serving a Section 42 tenant’s notice on the competent landlord.

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If you qualify and the notice is valid, the landlord is required to grant a new lease on the statutory terms. This means a 90-year extension on top of the existing lease term and ground rent reduced to a peppercorn.

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The formal route also gives a legal timetable. If the premium or terms cannot be agreed, either party can apply to the appropriate tribunal for a determination.

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The informal route

An informal lease extension is a private agreement between you and the landlord. It can sometimes be quicker, but it should be approached carefully.

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Unlike the formal route, the landlord is not required to offer the statutory 90-year extension or follow the statutory timetable unless a valid Section 42 notice has been served.

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Before accepting any informal offer, you should check:

• how many years are being added;

• whether any ground rent will remain payable;

• whether the lease contains new or revised rent review clauses;

• whether any other lease terms are being changed;

• whether the premium is reasonable compared with the likely statutory premium;

• whether the offer could affect saleability or mortgageability.

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You should be cautious about paying non-refundable upfront sums for a landlord’s valuation or administration costs unless you understand exactly what the payment covers, whether you will receive a copy of any valuation, and what lease terms are being offered.

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Ground rent and why it matters

Ground rent can have a significant effect on the value and marketability of a flat, particularly where the lease contains escalating, doubling, RPI-linked or value-linked ground rent clauses.

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A statutory lease extension reduces ground rent to a peppercorn. This is one of the key benefits of using the formal route.

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By contrast, informal lease extension offers need to be checked very carefully. Ground rent terms can affect whether buyers and mortgage lenders view the lease as acceptable.

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For example, a lease with 70 years remaining might be informally extended to 99 years but still include ground rent of £350 per year doubling every 10 years. On a simple nominal calculation, that type of clause could produce a very large ground rent liability over the term. It would also provide only a 29-year extension, whereas the statutory route would usually add 90 years to the existing 70-year term and reduce ground rent to a peppercorn.

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The figures and consequences will depend on the exact wording of the lease, so specialist advice is essential.

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Selling or buying a flat with a short lease

A short lease can make a flat more difficult to sell. Buyers may be concerned about the cost of extending the lease, and lenders may be unwilling to lend unless the lease is extended before or shortly after completion.

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If you are selling a flat with a short lease, you should consider taking advice before marketing the property. In some cases, starting the statutory process before sale can help reassure buyers.

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If you are buying a flat with a short lease, take advice before exchange of contracts. Although the two-year ownership rule has now been removed, there may still be situations where it is useful for the seller to serve a Section 42 notice and assign the benefit of that notice to the buyer on completion. This may help with timing, valuation date, mortgage requirements or sale negotiations.

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Qualification requirements and eligibility

To use the formal statutory route, you must usually be a qualifying leaseholder of a flat with a long lease.

A long lease usually means a lease that was originally granted for more than 21 years. The number of years left now is not the deciding factor. For example, a lease originally granted for 99 years can still be a long lease even if only 65 years remain.

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Other leases may also qualify, including certain leases with a right of perpetual renewal and some older forms of long residential lease.

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You may not qualify if:

• your lease is a business or commercial lease;

• your landlord is a charitable housing trust and the flat is provided as part of the charity’s functions;

• the flat is in certain excluded premises, such as some Crown, National Trust or cathedral precinct properties;

• you have a shared ownership lease and have not staircased to 100% ownership.

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Shared ownership leaseholders should take specific advice, as the position can depend on the lease, the percentage owned and the route being considered.

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Intermediate landlords and head leases

Some buildings have a head lease or intermediate landlord as well as a freeholder. This does not necessarily prevent a statutory lease extension.

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In some cases, the intermediate lease may only be a few days longer than the individual flat leases. Leaseholders sometimes assume this means they cannot extend their lease, but that is not necessarily correct. The statutory process identifies the competent landlord who has sufficient interest to grant the new lease.

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Where there is a head lease or intermediate lease, specialist advice is particularly important before serving notice.

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Costs to consider

Before starting the formal lease extension process, you should make sure you understand the likely costs.

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These may include:

• the premium payable for the new lease;

• your own valuation fees;

• your own legal fees;

• the landlord’s reasonable legal and valuation costs, although these do not usually include the landlord’s costs of tribunal proceedings;

• Land Registry fees and other conveyancing costs;

• tribunal or court fees if the matter becomes disputed.

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The landlord can also require a deposit after receiving a valid Section 42 notice. The deposit is 10% of the premium proposed in the notice or £250, whichever is greater.

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The premium proposed in the Section 42 notice should be realistic and supported by valuation advice. If the notice is invalid, withdrawn or deemed withdrawn, there can be cost consequences and delay before a further notice can be served.

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Valuation advice

Although it is not a legal requirement to obtain a professional valuation before serving a Section 42 notice, it is strongly recommended.

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A specialist lease extension valuer can advise on the likely premium, the appropriate figure to include in the notice and the range within which negotiations might reasonably settle.

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This is particularly important where:

• the lease has 80 years or less remaining;

• the lease contains high or escalating ground rent;

• there are unusual lease terms;

• the landlord has made an informal offer;

• the property is high value;

• the matter may need to go to tribunal.

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What happens if terms cannot be agreed?

After a Section 42 notice is served, the landlord must respond with a counter-notice by the required deadline.​ If the landlord admits the claim but the premium or lease terms cannot be agreed, there is a negotiation period. If agreement is still not reached, either party can apply to the First-tier Tribunal in England, or the Leasehold Valuation Tribunal in Wales, for the premium or disputed terms to be determined.​ Most lease extension claims settle by negotiation, but tribunal proceedings may be necessary where the parties are too far apart.

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Leasehold reform

Leasehold law is changing. The Leasehold and Freehold Reform Act 2024 includes reforms intended to make lease extensions cheaper and easier. Some changes are already in force, including removal of the two-year ownership rule.

Other important reforms are not yet fully implemented. These include proposed changes to increase the standard statutory lease extension term to 990 years, remove marriage value from the calculation and change how lease extension premiums and costs are calculated.

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Because the reforms are being introduced in stages, leaseholders should be cautious about delaying action solely because of future changes. Whether it is better to extend now or wait depends on your lease length, ground rent, sale or remortgage plans, and the likely cost of waiting.

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If your lease is approaching 80 years, already below 80 years, or contains a high or escalating ground rent, you should take specialist advice before deciding what to do.

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Our charges and services

We do not charge to carry out an initial check of your likely qualification based on the information you provide.

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Where instructed, we can help with the lease extension process by:

• reviewing the basic lease and title information;

• carrying out Land Registry searches;

• checking your likely eligibility for the statutory route;

• arranging an independent specialist valuation;

• advising on the likely premium range;

• helping prepare the figures needed for the Section 42 tenant’s notice;

• coordinating with your solicitor where legal drafting, service of notices, conveyancing or registration is required;

• assisting with negotiations following the landlord’s counter-notice;

• advising on next steps if the premium or terms cannot be agreed.

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Our fixed-fee services will be confirmed in writing before you proceed, so you know what is included and what further costs may arise.

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You will also need to budget for the premium, your solicitor’s fees, the landlord’s reasonable legal and valuation costs, and any tribunal or court fees if the matter becomes disputed.

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We cannot guarantee that an application will be successful, that a landlord will agree the premium proposed, or that a tribunal will determine the premium at a particular figure. However, we can help you understand the process, avoid common pitfalls and make informed decisions before you proceed.

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Before you take action

Before serving a notice or agreeing informal terms, you should check:

• how many years are left on your lease;

• the current ground rent and any future ground rent increases;

• whether the lease contains unusual or onerous clauses;

• whether you are likely to qualify for the statutory route;

• whether you intend to sell or remortgage;

• whether an informal offer is better or worse than your statutory entitlement;

• what total costs you may have to pay.

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A lease extension can protect the value of your flat, reduce ground rent and improve saleability. The right route will depend on your lease and your personal circumstances.