Anyone who owns a leasehold property needs to understand how to extend a lease before the length of the lease begins to run out. It’s a complex legal area, and one that’s worth getting your head around sooner rather than later – we explain the process for extending a lease and look at your options.

extending lease

Why would you extend your lease?

If you own flat or apartment in south west London, or are thinking of buying one, it is likely to be leasehold property. This is the most common form of flat ownership in England and Wales and means that while you own your own property, you do not own the building, but are renting it for a fixed period. When you decide to sell the flat, the lease is transferred to the buyer.

It is important to keep track of the length of time on your lease, especially if you are looking to sell in the future, as this will have an impact on the sale price you achieve.

A short lease will seriously reduce the value of the flat and could mean that you can only sell it to a cash buyer. This is because most lenders will not offer mortgages on properties where the lease is for less than 80 years.


Who’s allowed to extend a lease?

Under the 1993 Leasehold Reform, Housing & Urban Development Act, flat owners are entitled to a 90-year extension to their lease at a fair market price, as long as they have owned the property for at least two years.


When should I extend my lease?

As the number of years left on a lease begins to diminish, the value of the property can be affected. When your lease has less than 90 years left, you should think about negotiating an extension.

A lease with less than 80 years remaining will become more expensive to renew. When such a lease is extended, the freeholder is entitled to half of the increase in the value of the property, as well as the fee for extending the lease. This is known as the ‘marriage fee’ – because it marries two costs together.


What are the steps to extending my lease?

The legal process for extending your lease is called leasehold enfranchisement. The steps you’ll need to take are as follows:



If you wish to formally ask your freeholder to extend the lease, it is advisable to appoint a solicitor. You should also consult a valuation surveyor to recommend a realistic cost for extending your lease – known as the premium.


Serving notice on your landlord

You will then serve your landlord with a Section 42 notice, Under the 1993 Leasehold Reform, Housing & Urban Development Act, proposing your premium for extending the lease.


Counter notices

You will need to specify when your landlord should respond to you with a counter notice – this must be no less than two months from the date you served the original notice.

The landlord must respond, stating whether they accept your terms. You will then enter into negotiations until terms are agreed by you both.


Absent landlords

If your landlord doesn’t respond, or submits a response after the deadline, you can apply to the county court for a lease extension on the terms set out in your notice. You must do this within six months of the original deadline.


What is the First Tier Tribunal?

If you and the landlord fail to agree about the lease extension, it can be referred to an independent body known as the First Tier Tribunal. Orders made by the First Tier Tribunal can be appealed against in an Upper Tribunal if either party thinks there was a legal problem with original decision. Once the Upper Tribunal has given its ruling, it can be enforced by a county court order.


Paying for a lease extension

The cost of the extension is calculated by assessing the financial loss incurred by the freeholder in granting the extension. This will depend on factors including ground rent, other terms in the lease and the market value of the property.

It is difficult to provide an accurate estimate of the costs you will face when extending your lease, as these will vary dramatically according to your flat’s particular circumstances.

However, you can typically expect to pay a total of £6,000 plus costs to extend the lease of a flat valued at £500,000 which has 95 years remaining on the lease. The costs could rise to £9,000 if the lease has 85 years remaining and to £70,00 if there are only 60 years remaining. These figures are based on the Homeowners Alliance Lease Extensions Calculator and assume a peppercorn ground rent is payable.


Legal costs

The total amount you pay will be made up of the actual cost of the extension, plus the professional fees involved and the land registry fees. You will have to cover your own legal and valuation fees and those of the freeholder


How can I keep lease extension costs down?

It isn’t necessary to take this legal route if you can negotiate terms with your landlord informally. However, it is still advisable to have independent legal advice before agreeing to anything – to make sure you are receiving the most favourable terms possible.

The crucial thing, when it comes to extending a lease, is to begin in plenty of time. If the number of years on the lease falls below 80, you will be liable for the marriage fee and the process will be much more expensive.


Is it worth trying to buy the freehold instead of extending my lease?

If you live in a leasehold property, an alternative to extending a lease is to get together with your fellow leaseholders and buy a share of the freehold. This is known as collective enfranchisement.

You will need to get at least 50% of leaseholders in your block to agree to participate for the collective enfranchisement to go ahead. You would then jointly own the property outright.

If you are looking at leasehold properties in Wimbledon or Coombe or have a leasehold property to sell, we’d be happy to advise you. Please contact us to find out more.

About the author

Nicolas Holmes

Nick joined Robert Holmes to inject fresh ideas and help grow the New Homes department of Robert Holmes as well as helping to inject technology into the business and to grow its client base. Together with one of the Directors Nick is in charge of all Development opportunities that Robert Holmes deals with along with sales. Aged 40, he provides succession together with the two existing directors. Nick has always been focused on building client relationships and sales. He built up his own gallery in Chelsea, where he had a loyal following of customers and artists.

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