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Need to extend your lease? We look at how much it will cost, including solicitor and valuation fees. We’ve got a handy calculator to help you – plus see whether you could save on costs by waiting to renew your lease.
KEY INFORMATION
The cost of extending a lease depends on numerous factors including the property value, the length of the lease, the ground rent payable and how often it increases.
To get an idea of how much it may cost you to extend your lease, use our free handy leasehold extension calculator powered by the Government-funded Leasehold Advisory Service.
If you have a flat with 85 years left on the lease, that will be worth around £350,000 after the lease extension and with a ground rent of £100 per year, you may need to pay a lease extension premium of between £6,000 and £8,000. But you’ll have to pay professional fees and costs which could cost £2,000-£4,000.
However, costs of lease extensions in the UK vary widely. Also, under the current system, lease extension costs can increase sharply once there’s less than 80 years left on the lease due to the ‘marriage value’ being included in the costs. Although this is due to change. Read on for more on this.
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Get expert advice on extending your lease, buying your freehold or applying for the right to manage.
Using the example of a flat with 85 years left on the lease, expected to be worth £350,000 after the lease extension and with a ground rent of £100 per year, you may need to pay a lease extension premium of between £6,000 and £8,000 plus the below costs.
| Item | Typical cost |
|---|---|
| Lease extension premium | £6,000-£8,000 |
| Your valuation surveyor’s costs | £600-£900 |
| The freeholder’s valuation surveyor’s costs | £600-£900 |
| Your solicitor’s fees | £800-£1,300 |
| The freeholder’s solicitor costs | £800-£1,300 |
| Land registry fees | £65 |
The main lease extension costs you’ll pay are the leasehold extension premium, solicitor’s fees for you and the freeholder, and surveyor costs for you and the freeholder. Here’s more details on these costs and how much you may need to pay.
The biggest cost of extending a lease in the UK is usually the premium you agree with the freeholder. Costs vary widely but expect to pay at least £5,000.
The cost of the premium is calculated based on a formula outlined in the Leasehold Reform, Housing and Urban Development Act 1993, taking into account factors including:
To get a ballpark figure of leasehold extension costs in the UK use our handy lease extension calculator. But to get a more accurate figure of how much your lease extension could cost, get an estimate today from our lease extension specialists.
You’ll have to pay solicitor fees when you’re extending your lease. These fees vary but could cost between £800-£1,300. You’ll also need to pay your freeholder’s solicitor fees too. Make sure you 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.
You’ll also need a valuation surveyor with expertise in leasehold extension legislation and the local property market. This could cost around £600 to £900. Some solicitors, including our partnered firm Bonallack and Bishop, can put you in touch with surveyors they trust. However, you’ll also need to pay the freeholder’s valuation surveyor costs too.
It’s recommended to seek professional advice before taking action. Getting a valuation from a lease extension specialist can establish the likely premium and an expert valuer will also advise you on what offer to make.
Get expert advice on extending your lease, buying your freehold or applying for the right to manage.
If you buy a leasehold property, you’ll own your flat – not the whole building or land it stands on – and only for the length of your lease agreement. Once the lease expires, the flat is retuned to the freeholder. But in reality, most leases are extended well before then.
However, it comes with a cost: you’ll need to pay the freeholder when you extend the lease because they’ll have to wait for longer to regain possession of the property and they won’t receive any more ground rent once if this is reduced or removed when the lease is extended.
By comparison, with freehold properties, you own the building and the land it stands on indefinitely. Find out more in our guide Leasehold vs freehold – what’s the difference?
The answer to when should you extend a lease isn’t as simple as it used to be. The advice has always been to extend your lease before it falls below 80 years because once it’s below that threshold, the cost of a lease extension increases as you’ll also have to pay 50% of the ‘marriage value’ of the property. The marriage value is the amount of extra value which will be added to the property as a result of extending the lease. There is also the issue that getting a mortgage on a property becomes harder if you have a short lease of less than 80 years.
However, due to leasehold reform, this is changing. Once the Leasehold and Freehold Reform Act comes fully into effect, marriage value will be abolished. The Act aims to make it cheaper and easier for some leaseholders to extend their lease or buy their freehold but it could be more expensive for some.
A statement from the government on 21 November 2024, set out a timetable of how and when the government will implement the Act. However, while there’s still uncertainty about what the impact of the Act will be and when exactly it will come fully into force, the advice on when to extend a lease is subject to debate. Find out more information on what you should weigh up when making your decision in our guide on Leasehold Reform.
If you are a leaseholder considering whether to extend your lease or wait, you should seek advice from a leasehold specialist. You can get a free initial consultation and estimate from our leasehold specialist partners.
But what you choose to do will depend on factors like your lease length and your circumstances. For example:
Entering into informal lease extension negotiations with your freeholder may appear at first to be cheaper and quicker. But you could end up 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 or 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. Find more information in our guide Informal lease extensions explained.
If you don’t have cash in savings to cover the lease extension costs, there are other options.
There are 6 steps in the lease extension process:
Find more detailed information in our guide Lease extension process: A step-by-step guide.
Get expert advice on extending your lease, buying your freehold or applying for the right to manage.
Under leasehold reforms that we’re waiting to come into effect, the standard lease extension will increase to 990 years for houses and flats (up from 50 years in houses and 90 years in flats), so leaseholders have the right to more secure ownership without the hassle and expense of future lease extensions.
Leaseholders of flats have a joint right, with other flat-owners in the building, to buy the freehold of their building. This is known as a right of “freehold enfranchisement” and it means that the leaseholders become their own freeholder.
However, you can’t do it on your own: you have to get your neighbours involved too. The law allows at least half of the leaseholders to come together to buy the freehold of the block from the freeholder/landlord. Find out more in our guide Should I buy the freehold?
Leasehold reforms due to come into force also aim to make it easier and cheaper to buy the freehold. Find out more in our guide on Leasehold reform.
It’s difficult to give an estimate as the price of freeholds vary. You’ll need to get an accurate valuation from a surveyor. Also, make sure you get good legal advice too.
Get expert advice from our leasehold/ freehold specialist solicitor partners
Most people don’t need to pay stamp duty when they extend their lease. If you are extending the lease of the only property you own, you’ll only pay stamp duty if the premium is over £125,000. However, if you own multiple properties, or you jointly own the property with someone who owns more than one property, it’s likely that you’ll have to pay stamp duty if the lease extension premium is more than £40,000.
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. Find more information in Lease extension process: A step-by-step guide
If you don’t extend your lease, at the end of its term the property will revert to the freeholder. But you can avoid this by extending your lease.
Valuers working on lease extensions sometimes use a formula to work out how much a flat with a short lease is worth compared with a long lease. These estimates usually suggest a flat with 70-years left on the lease will hypothetically be worth about 88% of a flat with a really long lease.
In practice this can’t be relied upon. Generally, a short lease flat is worth what someone will pay for it. An informed buyer will think about how much they would pay if the flat had a long lease. They’ll then deduct the anticipated cost of the lease extension – including the professional fees associated with the transaction. They will knock extra off the sale price for the hassle and risk of doing a lease extension. For more information see our guide on buying a flat with a short lease.
