Should I Extend My Lease Before Selling?
A decision guide weighing the cost of extending against the price discount of selling as-is, broken down by lease band.
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How to Extend Your Lease
A lease extension adds years to your term, removes ground rent, and protects the value of your flat. This guide covers the two routes available, what each costs, how long each takes, and what has changed under recent legislation.
Lease Extension: The Basics
A leasehold flat is owned for a fixed term. As that term runs down, the flat becomes harder to mortgage, harder to sell, and eventually worth significantly less than an equivalent flat with a longer lease. Extending the lease addresses all three problems at once: it lengthens the term, extinguishes the ground rent (under the statutory route), and restores the flat's full mortgageability.
The right to extend is statutory for most leaseholders in England and Wales. You do not need the freeholder's goodwill; if they refuse to engage, the legal process compels them. That said, the process involves surveyors, solicitors, and formal legal notices on both sides, and the costs are real.
The 80-year threshold is the single most important number in lease extension. Below it, marriage value applies: the freeholder becomes entitled to 50% of the additional value created by the extension, which can double or treble the premium. Extending before the lease falls below 80 years is usually significantly cheaper than waiting.
Why Lease Length Matters
Mortgage lenders use lease length as a proxy for risk. Most require the lease to have at least 70 to 85 years remaining at the end of the mortgage term (not just at the point of purchase). A 25-year mortgage on a flat with 80 years left means the lender needs 105 years at the start, so many would decline. Each lender sets its own threshold; the practical effect is that a flat with fewer than 85 years remaining faces a narrowing pool of lenders.
Below 70 years, most high-street mortgage lenders will not lend at all. The buyer pool narrows to cash buyers, investors, and specialist lenders, which is reflected in the price. Below 60 years, even specialist lenders become cautious.
The 80-year threshold matters for a different reason: it is where marriage value applies. A flat with 79 years remaining costs considerably more to extend than one with 81 years, because the freeholder's share of marriage value is added to the premium at 80 years. Leaseholders who do not extend before the lease crosses 80 years often find the cost of extension rises sharply in the final years above 80 as the premium anticipates the approaching threshold.
The Two Extension Routes
Statutory extension
The formal route under the Leasehold Reform, Housing and Urban Development Act 1993. You serve a Section 42 notice on the freeholder specifying the premium you propose. The freeholder must respond within 2 months with a counter-notice. Negotiations follow, with the First-tier Tribunal (Property Chamber) as the backstop if no agreement is reached. The freeholder cannot refuse and cannot walk away.
The statutory route gives you 90 years added to the existing term, ground rent reduced to a peppercorn, and certainty that the process will complete. It is the benchmark even if you end up negotiating informally, because the statutory right defines the freeholder's minimum obligation.
Informal extension
A direct negotiation with the freeholder outside the formal process. Nothing is prescribed: the new term, the premium, and the ground rent are all matters for agreement. An informal deal can be faster and occasionally cheaper if the freeholder is cooperative, but the freeholder can withdraw at any point and may propose terms (such as a higher ground rent) that the statutory route would not allow. It is worth getting a surveyor's valuation before negotiating informally, so you know what the statutory premium would be.
Most leasehold solicitors recommend serving the Section 42 notice as a starting point, even if you intend to negotiate informally. Once the notice is served, the freeholder knows you have the statutory right and cannot simply ignore the process.
Who Can Extend
To use the statutory route, you must be the leaseholder of a flat (houses have different rules under separate legislation). The flat must be held on a long lease, originally granted for more than 21 years. Since 31 January 2025, when the Leasehold and Freehold Reform Act 2024 came into partial force, the two-year qualifying period has been abolished. You can serve a Section 42 notice as soon as you own the flat.
A few categories are excluded or have different rules. Shared ownership leases follow their own process and the standard statutory route does not apply in the same way until the leaseholder has staircased to 100%. Crown and National Trust properties are exempt from the statutory route. If you are unsure whether your flat qualifies, LEASE can advise without charge.
The Statutory Process Step by Step
Step 1: Instruct a surveyor and a solicitor
You need a surveyor experienced in leasehold enfranchisement to value the premium, and a solicitor to handle the legal process. Both should be instructed before the notice is served. The surveyor's valuation tells you what to propose in the notice; serving a notice at an unrealistic figure weakens your negotiating position.
Step 2: Serve the Section 42 notice
Your solicitor serves the notice on the freeholder (and any intermediate landlord, if one exists). The notice must specify the proposed premium, the new lease terms, and a response date of at least 2 months. Once served, the notice locks in the date for the purposes of the premium calculation: the premium is calculated on the basis of the lease position at the date of the notice, not the date of completion.
Step 3: The freeholder's counter-notice
The freeholder must respond within 2 months. They will typically admit the right and propose a higher premium. If they do not respond, the leaseholder can apply to court to force the extension on the terms in the original notice. If they serve an invalid counter-notice, similar remedies apply.
Step 4: Negotiate
Surveyors on both sides negotiate the premium. Most cases settle at this stage. The valuation methodology is set by statute and case law, so the range of plausible outcomes is usually narrower than it first appears.
Step 5: First-tier Tribunal (if needed)
If the parties cannot agree within 6 months of the counter-notice, either side can apply to the First-tier Tribunal (Property Chamber) for a determination of the premium. The Tribunal sets the figure based on evidence from both surveyors. Add 3 to 6 months to the overall timeline if this stage is reached.
Step 6: Complete the new lease
Once the premium is agreed, solicitors draw up the new lease. The leaseholder pays the premium and both parties' reasonable legal and valuation costs, and the new lease is registered at HM Land Registry.
Costs
The total cost of extending has four components.
The premium
The premium is what you pay the freeholder for the extension. It is calculated using a formula that accounts for the flat's value, the remaining lease term, the ground rent, and (below 80 years) marriage value. Above 80 years, premiums for a standard London flat typically range from £3,000 to £15,000. Below 80 years, the addition of marriage value can push the premium significantly higher: on a £300,000 flat with 75 years remaining, a premium of £20,000 to £40,000 is not unusual. LEASE provides a premium calculator that gives a rough estimate based on your lease and flat details.
Your professional costs
You will need a surveyor (typically £500 to £1,500 for the initial valuation and negotiation) and a solicitor (typically £1,500 to £3,000 for the extension process). Both fees vary with complexity and the seniority of the professional.
The freeholder's costs
The leaseholder must also pay the freeholder's reasonable legal and valuation costs. These are set by statute as "reasonable" rather than at the freeholder's discretion. Typical freeholder costs are £1,500 to £2,500 in legal fees and £500 to £1,000 in surveyor fees. If the freeholder instructs expensive advisers, you can challenge unreasonable costs at the Tribunal.
Tribunal fee
If the case goes to the First-tier Tribunal, the application fee is currently £200 to £500 depending on the claim value.
Timescales
An informal extension with a cooperative freeholder can complete in 3 to 6 months if both sides are motivated. The statutory process rarely completes in under 6 months: the statutory timetable alone (2 months for the counter-notice, then a negotiation period) accounts for 4 to 6 months before any Tribunal application. If the premium is disputed and goes to the Tribunal, 12 to 18 months from the date of the Section 42 notice is realistic.
The practical implication for sellers: if you are considering extending before selling, plan for at least 6 months, and build in contingency. Starting the process and then accepting a cash offer is possible; a cash buyer can often purchase the flat subject to the extension being in progress, or take the flat as-is and complete the extension themselves after purchase.
LAFRA 2024: What Has Actually Changed
The Leasehold and Freehold Reform Act 2024 (LAFRA) was passed with wide-ranging intentions: abolishing marriage value, extending lease terms to 990 years, and reforming the premium calculation. As of early 2026, only one provision has been brought into force.
The two-year qualifying period has been abolished, effective 31 January 2025. You no longer need to have owned the flat for two years before serving a Section 42 notice. This is the only substantive change currently in force.
The following provisions are not yet in force:
- Abolition of marriage value (still applies below 80 years)
- 990-year extension term (still 90 years under statute)
- Reform of the premium calculation methodology
- Prescribed rates for ground rent capitalisation
The government has said it intends to bring the remaining provisions into force but has not confirmed a timetable. If marriage value is eventually abolished, extensions below 80 years will become significantly cheaper. If you are planning to extend a short lease, it is worth taking current legal advice on timing, as the position may change. LEASE publishes updates on the implementation timetable.
Frequently Asked Questions
The two-year qualifying period was abolished on 31 January 2025 under LAFRA 2024. You can serve a Section 42 notice as soon as you own the flat.
90 years, added to whatever is left on the existing lease. A flat with 75 years left becomes 165 years. The provision in LAFRA 2024 to increase this to 990 years has not yet been brought into force.
Marriage value is the additional value created by merging the leasehold and freehold interests. It applies when the lease drops below 80 years, and the freeholder is entitled to 50% of it as part of the premium. On a £300,000 flat with 75 years remaining, marriage value might add £15,000 to £30,000 or more to the cost. The LAFRA 2024 provision to abolish marriage value is not yet in force.
No. The right is statutory. They must serve a counter-notice and engage with the process. If they fail to respond, the leaseholder can apply to court to force the extension on the terms in the original notice.
The statutory route follows the formal 1993 Act process: notices, counter-notices, and Tribunal as backstop. The freeholder cannot walk away. An informal extension is a direct negotiation; quicker if the freeholder cooperates, but the freeholder can withdraw and the terms are not standardised. Serving the Section 42 notice first is recommended even if you plan to negotiate informally.
Informal with a cooperative freeholder: 3 to 6 months. Statutory without Tribunal: 6 to 12 months. Statutory with Tribunal: 12 to 18 months from the date of the Section 42 notice.
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