Lease extension process: A step-by-step guide

Extending your lease can be a long and complicated process. We run through what's involved, costs and how to get the right expert help so you can take charge of every step of your lease extension and avoid the common pitfalls.

Paula Higgins CEO & Founder

What are the steps in the lease extension process?

If you want to extend your lease before these reforms come into effect, there are 6 steps in the lease extension process:

1. Inform the freeholder of your desire to extend the lease and that you will be pursuing the statutory route. If you have an absent freeholder, see our guide on what your options are.
2. Appoint a lease extension solicitor with expertise in the field and who is a member of the Association of Lease Extension Practitioners (ALEP). Get quotes and compare costs. Our partner lease extension solicitors provide advice you can rely on.
3. Find a valuation surveyor with expertise in leasehold extension legislation and the local property market. Some solicitors, including our partnered firm Bonallack and Bishop, can put you in touch with surveyors they trust.
4. Make a formal offer. You will have to serve tenants’ notice – your solicitor will able to take care of this.
5. Pay the deposit if one is required by the landlord. This will either be £250, or 10% of the lease cost in the tenants’ notice, if that exceeds £250.  If the landlord does require a deposit, this will have to be paid within 14 days, so it’s important to have this money readily available.
6. Negotiate a price. Your solicitor will advise or can handle this.

Government changes affecting leaseholders 2023

Leasehold reforms were announced in November 2023 with the introduction of the Leasehold and Freehold Reform Bill; proposals include making it cheaper and easier to extend your lease or buy the freehold.

But there is no guarantee that all the reforms will make it into the final Bill, that the Bill will get Royal Assent or that it will be passed before the next General Election. Read more about the proposed changes in our guide on Leasehold reform.

How much does the lease extension process cost?

The lease extension process cost depends on the value of the property, the number of years left on the lease, the annual ground rent, the value of improvements done to the property paid by the leaseholder and external factors such as expected rate of returns on investments. The lease extension valuation is a complex calculation, but also a subjective one which means it is open to negotiation – or decision by a tribunal.

While you can get an idea of the cost of buying up more years (referred to as the premium you have to pay to the freeholder for the extended years) with our lease extension calculator approaching a valuation surveyor with experience of lease extensions will be worth the investment and stop you paying over the odds for your extension.

Want to know how much your lease extension will cost? Get an estimate today from our lease extension specialists

On top of the cost of buying the extra years on your lease (the premium) you have to pay:

• The costs of getting legal advice (your solicitor)
• The lease extension valuation report (a surveyor)
• Your freeholder’s reasonable legal and own valuation costs (yes, you are required by law to pay these)
• Land Registry fees

The government is planning reforms to the lease extension process to make the lease extension process easier but it is expected to be years before these are law.

Do I need legal expertise for the lease extension process?

Yes! It can be tempting to enter into informal lease extension negotiations with your freeholder. By coming to an informal arrangement, you usually only have to pay your legal and valuation costs, while taking the formal lease extension route will mean you have to pay both yours and the freeholder’s costs. But if ever the phrase “false economy” applies, it is here! You may be saving on legal costs but you could be paying thousands more for the lease extension than you should be and, in the worst case scenario, make your home unsaleable.

The main issue is that with an informal lease extension the freeholder can make changes to the small print of the agreement to their advantage, for example, by retaining your ground rent. When you choose the formal statutory route, your ground rent is reduced to nothing. From 30 June 2022, your freeholder will no longer be able to increase your ground rent with an informal lease extension.

However, they can leave the existing ground rent (including any scheduled rises) in your lease for the remainder of the current term.  Another trick is to only grant you an extension back up to 99 or 125 years, whereas with the statutory route, you will get your existing term plus 90 years.  There are almost limitless opportunities in an informal lease extension to introduce “modernisations” – which are usually terms which benefit the freeholder and not the leaseholder.

Doing things formally also affords you better protection should things go wrong. As long as you’ve gone down the formal “statutory” leasehold route, if there are any disagreements in terms of costs or other disputes you can take your case to a property tribunal.  There are also time limits with the formal route to lease extension so your freeholder can’t drag their feet.

Our lease extension specialist partners can provide a free estimate and advice you can rely on.

If the freeholder doesn’t accept the amount you’ve offered you will have to negotiate. Then if you still can’t come to an agreement, you will have to apply to the First Tier Tribunal (Property Chamber). While cases going to the tribunal are relatively uncommon, they can be time-consuming and expensive, so it’s best to avoid this if you can.

How long does the lease extension process take?

The lease extension process normally takes from 3 to 12 months, and it can be made quicker by efficient valuers, solicitors and other professional help, so choose these people wisely.

How can I keep lease extension process costs down?

To help reduce the cost of extending a lease:

• Extend your lease as soon as possible – especially before the 80 year point when it becomes more expensive to buy up more years
• Appoint a specialist solicitor for the right legal advice
• Instruct a specialist surveyor – so you get the right valuation premium and don’t pay over the odds

For more advice, see our guide on lease extension valuation.

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

It could be worth buying the freehold on your home so that you own it outright. But there are complicated legal procedures and legal costs involved in this process.  You will have to get over half of all the leaseholders to agree, which could be difficult if, for example, you live in a building divided into apartments. Read more about what to consider in our guide Should I buy the freehold

Get FREE initial telephone advice and a FREE ESTIMATE of how much your lease extension is likely to cost you – rough estimate of the likely price of your premium, legal and valuation costs from our lease extension partners