Legal & Tenure

How to Extend Your Lease — The Statutory Route and What It Costs

Leaseholders with a lease below 90 years should consider extending. The statutory route gives qualifying leaseholders an absolute right to a 90-year extension at zero ground rent. This guide explains the process and costs.

Published: 17 Mar 2026 · Updated: 17 Mar 2026 · 9 min read

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Why Lease Length Matters

Every leasehold property has a lease term that counts down from the original grant date. A flat sold on a 125-year lease in 1990 now has around 89 years remaining. As the lease shortens, the property becomes harder to mortgage and worth less. Below 80 years, the cost to extend rises sharply due to a concept called marriage value.

As a general rule: if your lease is below 90 years, you should take advice on extending it now.

Qualifying for the Statutory Route

The statutory right to extend a lease is set out in the Leasehold Reform, Housing and Urban Development Act 1993. To qualify you must:

Have owned the flat for at least two years (note: the Leasehold and Freehold Reform Act 2024 removes this requirement once the relevant provisions are commenced)
Hold a long lease (originally granted for more than 21 years)
Own a flat (houses have a separate regime under the 1967 Act)
Not be excluded (certain types of property, including those owned by charitable housing trusts, may be excluded)

Business leaseholders and shared ownership leaseholders below 100% do not qualify.

What the Statutory Extension Gives You

A statutory lease extension adds 90 years to the current unexpired term (so a flat with 75 years left becomes one with 165 years remaining) and converts the ground rent to a peppercorn (effectively zero). The new lease terms are otherwise broadly the same as the existing lease.

The Section 42 Notice Process

1. **Instruct a solicitor and surveyor.** You need a specialist leasehold valuation surveyor to calculate the premium and a solicitor experienced in lease extensions to serve the notice.

2. **Serve the Section 42 notice** on the freeholder. This notice formally triggers the statutory process and must state the premium you are proposing to pay. Getting this figure wrong can prejudice your position.

3. **The freeholder serves a counter-notice** within two months, either accepting your proposed terms, proposing different terms, or contesting your right to extend.

4. **Negotiation period.** The parties negotiate the premium. If agreement cannot be reached within six months of the counter-notice, either party can apply to the First-tier Tribunal (Property Chamber) to determine the terms.

5. **Completion.** Once terms are agreed (or determined by tribunal), the new lease is completed. Your solicitor registers the new lease at HM Land Registry.

How the Premium is Calculated

The premium is calculated by specialist surveyors and takes into account three main components:

**Diminution in value of the freehold** — the reduction in the freeholder’s interest caused by the extension
**Ground rent capitalisation** — the present value of the ground rent income the freeholder will lose
**Marriage value** — half of the increase in the flat’s value created by the extension. This only applies where the unexpired term is below 80 years, and is often the largest element of the premium

Remaining Lease Length	Typical Premium (2-bed London flat at £400,000)
90 years	£2,000–£5,000
80 years	£8,000–£15,000
75 years	£15,000–£30,000
70 years	£25,000–£50,000
60 years	£45,000–£80,000+

These figures are illustrative only. Premiums vary significantly based on ground rent terms, property value and location.

Professional Costs

In addition to the premium paid to the freeholder, you should budget for:

**Your solicitor:** £1,500–£3,000
**Your surveyor:** £1,000–£2,500
**Freeholder’s reasonable legal and surveyor costs** (you are required to pay these under the Act): typically £1,500–£3,000
**Land Registry registration fee:** £100–£500 depending on premium
**SDLT:** May be payable on the premium depending on amount

Total professional costs typically range from £4,000 to £8,000 on top of the premium.

The Informal Route

You can also approach the freeholder directly and negotiate a lease extension without serving a Section 42 notice. This can be faster and cheaper in straightforward cases — but you have no statutory protection. The freeholder can walk away at any time, change their terms, or charge whatever premium they choose. The informal route carries real risk if the freeholder is uncooperative.

Timing: Buy Short or Extend First?

If you are buying a flat with a short lease, you have two options. You can negotiate a reduction in the purchase price to reflect the short lease and extend after purchase (bearing in mind the two-year wait before you qualify for the statutory route). Or the seller can initiate the extension process before completion and ‘assign’ the benefit of the Section 42 notice to you at exchange. The second route is generally preferable as it avoids the two-year wait and protects the property’s mortgageability from day one.

Property Passport UK records the current lease length and any registered lease extension applications for properties in England and Wales, helping leaseholders and buyers track this critical data point.