When to extend your lease

Leasehold reform on the horizon is welcomed news but how does it affect when to extend your lease? We take a look.

Paula Higgins CEO & Founder

What is a lease extension?

If you own a leasehold property, a lease extension refers to the legal agreement of extending the term of your lease. If you don’t extend your lease, at the end of its term the property will revert to the freeholder. It is a totally unfair relic of feudal laws, which you avoid by extending your lease.

What changes is government making to leasehold?

The Leasehold and Freehold Reform Act 2024 is now law – but it hasn’t come fully into force yet, so leaseholders aren’t feeling the full benefits. 

Read more about the expected changes and timeline of implementation in our guide on Leasehold reform.

Should I extend my lease now? 

If you’re a leaseholder wanting to know when to extend your lease, you’ll want to know what these proposed changes mean for you and whether you should wait to extend your lease. As we wait to see what happens with leasehold reform, when to extend your lease will depend on your circumstances – read on to find out more

When to extend your lease

With the uncertainty of when and if leasehold reform will happen, we spoke to Linz Darlington of lease extension specialists Homehold about how when to extend your lease will depend on your circumstances. For example:

For example:

• Lease length: 80 to 82 years – It’s almost certainly advisable to extend. It’s unlikely that the reforms will be through before your lease drops below the “80-year mark” at which marriage value kicks in making it more expensive.
• Lease is above 82 years – It’s up to you: it is likely be made cheaper by the reforms, but it might also made more expensive. If you’re comfortably over the threshold, say 100 years, you could wait to see what reforms come.
• Ground rent is high: Consider waiting because it may be made cheaper for you in the future.
• Lease below 80 years: Again, you may wish to consider waiting as it might be made cheaper for you in the future by the abolition of marriage value.
• If you are planning on selling your leasehold property in the near future. If you have under 90 years left on your lease it may worry potential buyers. While you can sell a property with a shorter lease, you are likely to lose money on the value of your home.

However, everyone’s personal circumstances are different. So getting expert advice is recommended.

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

Why would I not want to extend the lease?

Depending on your circumstances, it might not be worth getting involved in the expense and hassle of extending your lease if:

• You have a long lease already (over 90 years), there is probably little benefit to extending it (unless you want to get rid of the ground rent)
• You are strapped for cash and mortgaged to the hilt. Lease extensions can be very expensive (many thousands of pounds), so you need to work out first whether you can afford it.
• You are only planning to be in the property a couple of years before moving on (unless you need to extend the lease to make it attractive to buyers)
• You plan to buy the freehold in its entirety (owning the freehold of a house makes the question of extending the lease redundant; in the case of flats, leases may still need to be extended but if you and your neighbours are the freeholder it is easier and cheaper to do this)
• You are not likely to outlive the term of the lease. It can be quite rational just to let your heirs inherit the problem

When to extend your lease to avoid costs rocketing

As we explain above, leasehold reform is on its way – we hope. But until and unless that happens, as the lease gets shorter, the cost of extending it gets more expensive at an exponential rate. This is particularly true for leases of less than 80 years, where the cost of lease extension really starts to bite.

At about 60 years, the cost of extending the lease increases by about 1% of the value of the property each year – i.e. if the property is worth £250,000, the bill for extending the lease will go up about £2,500 a year. When the leasehold gets down to zero years, it is practically valueless as the whole property reverts to the freeholder (though for a certain period after expiry of the lease you may still have a right to extend the lease).

How much does it cost to extend a lease?

The cost of extending a lease depends on the property value, the length of the lease, the ground rent payable and how often it increases. For more advice, see our detailed guide on lease extension costs.

Lease extension costs example

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 with leasehold reform.

To get a rough idea of how much it may cost you to extend your lease, use our free leasehold extension calculator powered by the Government-funded Leasehold Advisory Service.

And get a free, no obligation quote for your lease extension from our leasehold expert partners:

Am I allowed to extend the lease on my flat?

Yes. Leaseholders had been required to have owned a property for at least two years before they could extend their lease. But in January 2025, Housing minister Matthew Pennycook, switched on a key part of the Leasehold and Freehold Reform Act, signing regulations to remove the two-year ownership rule for leaseholders of flats and houses to extend their lease or buy their freehold. Although in reality you’ll need to wait until the Land Registry application has been processed before you can serve the notice.

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