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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.
If you want to extend your lease before these reforms come into effect, there are 6 steps in the lease extension process:
Get expert advice on extending your lease, buying your freehold or applying for the right to manage.
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 for implementation in our guide on Leasehold reform.
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.
On top of the cost of buying the extra years on your lease (the premium) you have to pay:
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.
Yes! It can be tempting to enter into informal lease extension negotiations with your freeholder because it may appear cheaper and quicker. But if ever the phrase “false economy” applies, it is here! 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.
Get expert advice on extending your lease, buying your freehold or applying for the right to manage.
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.
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.
To help reduce the cost of extending a lease:
For more advice, see our guide on lease extension costs.
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
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