Lease Extensions: A Complete Guide
Protect your property's value by understanding your right to extend your lease
Last updated: January 2026
Why Extend Your Lease?
A lease is a wasting asset. Unlike freehold properties, the value of a leasehold property decreases as the lease gets shorter. This decline accelerates dramatically once the lease drops below certain thresholds.
Extending your lease protects your property's value and makes it easier to sell or remortgage. Most mortgage lenders require a minimum lease length (typically 70-80 years remaining), and buyers are often put off by short leases due to the cost and complexity of extending later.
Before 80 years
Extending is relatively straightforward and affordable. No "marriage value" is payable.
Below 80 years
Costs jump significantly due to marriage value. The shorter the lease, the more expensive it becomes.
The 80-Year Rule & Marriage Value
The 80-year threshold is crucial in lease extensions because of something called marriage value.
Marriage value is the increase in the property's value that results from merging the lease with the freehold interest (or extending the lease significantly). Under current law, if your lease has less than 80 years remaining, you must pay the freeholder 50% of this marriage value on top of the other extension costs.
Example
A flat worth £300,000 with 75 years on the lease might be worth £340,000 with a new 165-year lease. The £40,000 increase is the marriage value, and you'd owe the freeholder £20,000 (50%) of this, on top of the base premium.
This is why it's so important to extend your lease before it drops below 80 years. The difference in cost can be tens of thousands of pounds.
Future reform planned
The Leasehold and Freehold Reform Act 2024 will eventually abolish marriage value, but this part of the Act has not yet been brought into force. Until then, the 80-year rule still applies.
Leasehold Reform: What's Changed
The Leasehold and Freehold Reform Act 2024 made changes to lease extension rights. Some provisions are now in force; others are still pending.
In Force (31 January 2025)
No more 2-year ownership requirement
Previously, you had to own your property for at least 2 years before serving a Section 42 notice. This requirement was abolished on 31 January 2025 (SI 2025/57). You can now start the formal extension process as soon as your ownership is registered at the Land Registry.
Your Existing Statutory Rights
These rights have existed since the 1993 Act and remain unchanged:
90-year extension for flats
Flat leaseholders have the right to add 90 years to their existing lease at a premium determined by statutory formula.
Ground rent reduced to peppercorn
When you extend using the statutory route (Section 42), your ground rent is reduced to zero (a "peppercorn" rent) for the extended term. This has been a feature of statutory extensions since 1993.
Coming Soon (Not Yet In Force)
These provisions of the 2024 Act are awaiting secondary legislation:
990-year standard extension
The Act will increase the standard extension term from 90 years to 990 years. This requires secondary legislation and is not yet in force.
Marriage value abolition
The Act will abolish marriage value (the additional cost payable when a lease falls below 80 years). This is subject to ongoing legal challenges and is not yet in force.
Standardised valuation
New calculation rates for lease extension premiums are expected after government consultation. The consultation was planned for 2025 but has been delayed.
For the latest implementation updates, check GOV.UK or the LEASE advisory service.
Costs Explained
The cost of extending your lease depends on several factors:
- Property value - Higher value properties have higher premiums
- Years remaining - Shorter leases cost more to extend
- Ground rent - Higher ground rents increase the premium
- Marriage value - Payable if under 80 years remaining
Example Costs
For a flat worth £350,000 after extension, with £100/year ground rent:
| Years remaining | Est. premium |
|---|---|
| 85 years | £6,000 - £8,000 |
| 75 years | £15,000 - £20,000 |
| 65 years | £30,000 - £40,000 |
| 55 years | £50,000 - £70,000 |
These are estimates only. Use a professional valuation for accurate figures.
Professional Fees
On top of the premium, you'll also need to pay:
- Your solicitor - £800 to £1,500
- Your valuation surveyor - £600 to £900
- Freeholder's solicitor - £500 to £1,000
- Land Registry fee - Based on premium amount
Free calculators
The Leasehold Advisory Service offers a free lease extension calculator to estimate your costs.
The Process
There are two routes to extending your lease: the statutory route (using your legal rights under the Leasehold Reform, Housing and Urban Development Act 1993) or an informal negotiation with your freeholder.
Statutory Route (Section 42)
The formal process gives you legal protection and a guaranteed outcome:
Get a valuation
Instruct a specialist surveyor to value your lease extension premium. This is crucial for the negotiation.
Serve Section 42 notice
Your solicitor serves a formal notice on the freeholder specifying the premium you're willing to pay and the terms you want.
Counter-notice (2 months)
The freeholder has 2 months to respond with a counter-notice, either accepting your offer, making a counter-offer, or disputing your right to extend.
Negotiation period
You have 6 months from the counter-notice to agree terms with the freeholder or apply to the First-tier Tribunal.
Tribunal (if needed)
If you can't agree on the premium, the First-tier Tribunal (Property Chamber) will determine the price.
Completion
Once terms are agreed, your solicitor completes the lease extension and registers it at the Land Registry.
Timeline
The statutory process typically takes 6-12 months. If it goes to Tribunal, it can take longer.
Informal Route
You can approach your freeholder directly to negotiate an extension without using the formal process. This can be quicker and cheaper, but has risks:
- No legal protection if the freeholder backs out
- Freeholder may demand unfavourable terms
- May not reduce ground rent to peppercorn
If you go informal, always get independent legal advice before signing anything.
How OpenCourtyard Helps
While OpenCourtyard doesn't handle the legal process of lease extensions directly, our platform helps resident communities coordinate and share information:
Coordinate with neighbours
If multiple leaseholders in your building are considering lease extensions, you may be able to negotiate better terms together or share surveyor costs. Our platform makes it easy to find interested neighbours.
Share recommendations
Has someone in your building already extended their lease? They can share their experience and recommend surveyors and solicitors who know your building.
Discuss with your community
Use our forum to discuss lease extension strategies, compare experiences, and help newer leaseholders understand the process.
Important: This guide provides general information and is not legal advice. Leasehold law is complex and reform implementation dates are subject to change - always verify current rules with official sources and consider seeking professional advice for your specific situation.
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