Should I extend my lease?

Plus step-by-step guide on how to do it

Updated 22 November 2024

Homeowners can rack up a bill of £1,000s or even £10,000s trying to extend their lease. Thankfully the Government is in the process of making extending both easier and cheaper – but reform keeps getting hit by delays. This guide talks through why leases need extending, when it becomes necessary, and how to do it. Plus, check out our What is a leasehold? guide for more on how a leasehold works.

Thank you to Linz Darlington, managing director of Homehold lease extensions, for fact-checking this guide.

Overhaul of lease extensions underway

Extending a lease when it gets too short can be a complicated and stressful process. It can also leave leasehold homeowners £1,000s – and in the worst-case scenario, £10,000s – out of pocket.

But following years of pressure, the Government is making it cheaper and easier for leaseholders to extend their lease or buy their property's freehold.

It's hoped these changes – outlined in the Leasehold and Freehold Reform Act 2024 – could save some homeowners £1,000s. In particular, leasehold homeowners with leases under 80 years in length, and those who pay high levels of ground rent, are expected to benefit from the changes. However, it's possible some leaseholders will lose out.

The Leasehold and Freehold Reform Act technically became law in May 2024, a major milestone. However, there won't be any practical impact for leaseholders until extra legislation is laid – something that is unlikely to happen a while.

That's because, in November 2024, the Labour Government described the Leasehold and Freehold Reform Act as having seriously "flaws" and not being ambitious enough. It's vowed to go back to the drawing board, but it's unclear whether this means the Leasehold and Freehold Reform Act will be amended or replaced by something new entirely.

Either way, it's unlikely homeowners will see any change to how leasehold works until at least 2026. Plus we don't know exactly how much cheaper extending a lease will become.

The leasehold changes – what we know so far

Here's how the process of extending a lease will change if the Leasehold and Freehold Reform Act, in its current format, takes practical effect:

All leaseholders will be able to extend their lease by 990 years. Currently it's only possible to extend the lease on a leasehold house by 50 years (and you're only able to do it once), while leases on flats can be only be extended by 90 years at a time.

Many who extend their lease will pay less – though we don't know by how much. One of the charges involved in the cost of extending a lease or purchasing a freehold, known as 'marriage value', will be abolished. Marriage value is the amount of extra value a lease extension would add to your property – something you have to share with your freeholder if you're extending a lease that's less than 80 years in length (see full explanation below).

Separately, many leaseholders will no longer have to cover their freeholder's legal and valuation costs (an expense leaseholders currently have to cover if extending a lease).

While we can't say for certain how much cheaper extending a lease and buying a freehold will become once these changes take effect, it is expected to be in the £1,000s.

New leasehold homeowners won't have to wait two years to extend their lease. Currently leaseholders must have owned their property for at least two years – to be precise, their name must have been on the property's title deeds for that long – before they can extend their lease or purchase the property's freehold. This requirement will be scrapped.

These leasehold changes haven't taken effect yet – and they might not until at least 2026

While the Leasehold and Freehold Reform Act 2024 is now law, it's still unclear when it'll actually become cheaper to extend a lease and buy your freehold. As mentioned, this is partly because additional legislation needs to be laid first.

Furthermore, the Labour Government says the Leasehold and Freehold Reform Act (brought in by the Conservative Government) is "flawed" and not ambitious enough, so it has vowed to go back to the drawing board. It's not clear whether this means the act will simply be amended or replaced entirely by the Leasehold and Commonhold Reform Bill (which the Labour Government has also introduced).

Either way, it's going to be a while become the changes to leasehold take effect (consultation is set to begin in 2025).

Separately, the Leasehold Reform (Ground Rent) Act entered law and took effect in 2022, banning ground rent on new leases and preventing it being added to existing leases via informal lease extensions. This is separate to the wider leasehold reform discussed above.

So the question for many leaseholders is: Should I extend my lease now or wait?

The question is not easy to answer, and it'll depend on your circumstances – for instance, whether you're looking to sell your property in the immediate future and how long is currently left on your lease. We discuss the issues you need to consider when thinking about a lease extension in the next section.

Why do I need to extend my lease? How it currently works

There are over four million leasehold flats in England and Wales, and it's the most common way of owning a flat. Owning a leasehold gives you the right to live in a property for a set period of time, which can be years, decades or centuries. See more on how a leasehold works and how it differs from a freehold property in our What is a leasehold? guide.

A leasehold property with a decent-length lease (100+ years) can add thousands to its marketing value. Generally though, the shorter the lease (particularly under 90 years), the lower the asking price. Where a lease is considered short it can knock off £1,000s.

If a lease is under 80 years it's considered dangerous territory, and can make a property difficult to sell or remortgage if you already own it, while for buyers, lenders may be unwilling to give you a mortgage on it. This is why it can become necessary to extend your lease.

We want to sear a point on to your brain...

There is a magic number of years when leases become MUCH pricier to extend. And that magic number is:

It's in the interest of a freeholder to let your lease drop below 80 years (even by just one day). This is because at that point the freeholder will rake in the cash, as after that you will pay 50% of the property's 'marriage value', on top of the usual lease extension price.

Marriage value applies when a lease drops to less than 80 years in length, and is a cost the leaseholder must pay to the freeholder.

In rough terms, marriage value is equal to the increase in the value of a property once its lease has been extended – and the freeholder is entitled to a 50% share of this increase. So if your property increased by £10,000 in value after a lease extension – and provided your lease had been less than 80 years in length – your freeholder would be due about £5,000.

If you're looking to buy a flat, alarm bells should sound if a lease is nearing or below 80 years – don't just accept estate agents' promises of easy extensions.

Here is our traffic light guide for leases:

RED LIGHT. Lease of less than 80 years – WARNING, you're in the danger zone. You urgently need to think about your lease if it's near to 80 years. Once a lease drops under 80 years, 'marriage value' kicks in. If your lease is under 70 years, mortgages may at best get more expensive, and at worst you might struggle to get one.

Properties under 60 years in length are virtually un-mortgageable, making remortgaging nigh-on impossible. Here, you'll need to talk to a specialist lease extension valuer. A lease that's this short can make a property practically unsellable, so excellent legal advice is a must.

Lease of less than 80 years – shall I wait for the changes to the leasehold system to take effect?

- By waiting you probably won't have to pay 'marriage value'. If and when marriage value is scrapped, this should make extending a lease much cheaper for you – so it might well be worth waiting for the changes to kick in (with the caveat it's still not clear exactly how much cheaper extending a lease will become or when it'll take effect).

- If you've already got a really short lease, it's very unlikely someone will buy your property. So if you're desperate to sell then you might not have the option to wait to extend.

- If you're not planning on moving then it might be worth the gamble waiting until the changes kick in. On the other hand, if you don't extend you might struggle to remortgage and get stuck on your lender's expensive standard variable rate.

AMBER LIGHT. Leases between 80 and 89 years – it's really time to consider your options. Everyone, whether selling or staying, should really start thinking about extending their lease once it gets to 83ish years. You should probably begin considering it even sooner than that if you're able. Where a lease has 81 or 82 years left, the cost of extending can still increase by £100s or even £1,000s, as the 80-year mark is so close and the need to extend is more urgent (extending a lease can take time too – so don't leave it until the last minute).

Lease between 80 and 89 years – shall I wait for the changes to the leasehold system to take effect?

- If you're looking to sell in the near future there's an incentive to extend sooner if your lease is ticking down to 80 years, otherwise you risk not getting what price you're asking for the property. Having said that, if you do extend now, what you pay for the extension might be more than if you waited for the new changes to come into effect...

- Pay an expensive ground rent? There's an incentive to wait. The changes proposed will make extending a lease cheaper for most leaseholders who pay a ground rent that's more expensive than 0.1% of their property's value (for example, £250/yr on a £250,000 flat).

- If you're not looking to move any time soon, you could wait. In this situation you might feel more inclined to wait until the changes kick in before extending, as you don't need to impress any potential buyers. Again though, we're not sure how much the changes will reduce the cost of extending a lease by, and in some cases it might actually become more expensive. Plus we don't know exactly when the changes will take effect.

GREEN LIGHT. Lease of 90+ years in length – no need to worry (yet). If you've more than 90 years remaining, the value added to your property of extending the lease may only be a smidgeon more than your costs – see potential added values in our table. (Though, of course, who knows what little things can sway people to pay more for one property over another?)

Lease of 90+ years – shall I wait for the changes to the leasehold system to take effect?

- Whether or not you're looking to sell in the near future, it might well be worth waiting until the changes kick in (though there's still an element of risk). A lease length of 90, 95 or 100+ years shouldn't have any negative impact on your selling price, so extending your lease may not even be relevant right now. And by the time it does become relevant, the changes might have made extending a lease cheaper for you.

But be mindful that in some situations – for example, where you have a long lease and a low ground rent – the changes could actually make extending a lease more expensive. This isn't certain though and we'll update the guide when we know more.

Note: From this point on, this guide reflects the current leasehold system and how much it would cost to extend a lease right now – in other words, not how much it'll cost once the changes described above have come into effect.

Who can extend their lease under the current system?

To be legally entitled to extend your lease, you need to have been registered as the owner of the property with the Land Registry for at least two years.

The registration date usually happens a few days to a few months after you complete the purchase of your property. But be careful, if you add a partner or a friend to the title deeds later down the line, this two-year clock resets.

You won't have the right to extend your lease if you originally bought your property through shared ownership and haven't yet increased your share of the property to 100% (known as 'staircasing').

You don't need to have lived in the property for two years, just owned it.

How long can I extend the lease on my FLAT by?

Under the 1993 Leasehold Reform Act, most flat-owners are legally entitled to get 90 years added to their lease at a fair market price. Remember, you'll need to have been the registered owner of your property for at least two years to qualify. Also:

There is no restriction on how many times the lease of a flat can be extended.
Extending will have the benefit of reducing your ground rent (if you have any) to zero.

How long can I extend the lease on my HOUSE by?

Freehold houses come under different law. You usually only have the right to extend your lease by 50 years, rather than 90 years with flats. The freeholder could grant more than 50 years if they want, but it's up to them.

The law is even trickier here than with flats, so seek advice from a solicitor with experience in the area. Typically houses are sold on a freehold basis, but in recent years new-build houses have been sold, controversially, as leaseholds.

As the laws on leasehold houses are more restrictive, most owners tend to buy their freehold rather than extend their lease. For full info on leasehold houses, go to the Leasehold Advisory Service site.

Want to ditch your freeholder?

Often a building's flat-owners are legally entitled to buy the freehold and take over the building's management between them – an arrangement known as 'share of freehold'.

It's usually then easy and cheap to extend the lease of your property at the same time, and you can normally do so up to 999 years. But obviously taking over a building's management entails more responsibility on your part.

As a rule of thumb, the cost of a share of freehold for one flat (excluding legal fees) is similar to extending a lease by 90 years. Alternatively, you may still have a legal right to manage your building even if you're unable to buy the freehold.

You'll need at least half of the flat-owners in the building to take part if you want to buy the freehold. For more information on how the process works, see the Leasehold Advisory Service website.

How much will it cost to extend my lease right now?

The price depends on several variables, including the flat's value, the lease length and the ground rent. It also depends on your negotiations. See the tables below for some examples.

Bear in mind leasehold law is hideously complicated so costs can vary dramatically.

For a rough estimate, ask other residents in your building how much their extensions cost (if they've had them done), although take this with a pinch of salt as prices vary.

Other costs to factor in

On top of the cost of the lease extension itself, you pay a few other fees:

Your valuation, negotiation and legal fees

You'll need to pay for a valuer to estimate the price of your lease extension and negotiate with your freeholder on your behalf. You'll also need to pay a lawyer to review your updated lease and register it at the Land Registry. You can use a separate valuer and lawyer, or use a company that does it all under one roof.

Your freeholder's valuation and legal fees

You'll also need to pay the freeholder's reasonable costs and valuation fees – and often these aren't very reasonable! Ask your solicitor whether they have experience challenging these to ensure you aren't paying too much.

TOTAL COST FOR ALL OF THE ABOVE: About £4,000-£5,000.

Importantly, this doesn't include the freeholder's costs for negotiating the price or for dealing with court or First-Tier Tribunal applications in case you end up having to take it that far.

Stamp duty

While stamp duty does apply to lease extensions, it's unlikely that you'll need to pay it. That's because if the lease you are extending is the lease on your only main residential property, you'll be charged a rate of 0% stamp duty on the first £250,000 of the cost of the extension. So, for example, if the cost of extending your lease was £10,000, you'd pay nothing in stamp duty.

If you own more than one residential property however, stamp duty is normally charged at a rate of 5% – though the premium to extend your lease must cost more than £40,000 in the first place for this 5% rate to apply. If the premium is above £250,000, the rate of stamp duty will be higher than 5%.

Typical TOTAL costs to extend a lease

The tables below show how much it might cost in total to extend a lease of a flat, though do note that these figures are estimates and costs can vary by £100s or even £1,000s.

Typical cost to extend a lease on a £200,000 flat by 90 years

LEASE LENGTH	EXTENSION COST	PROFESSIONAL FEES (1)	TOTAL	POTENTIAL ADDED VALUE
90 years	£4,500	£4,000	£8,500	£12,500
85 years	£5,500	£4,000	£9,500	£16,500
79 years	£13,000	£4,000	£17,000	£19,500
70 years	£19,500	£4,000	£23,500	£25,000
60 years	£28,000	£4,000	£32,000	£33,000
Extension costs and added value from Homehold, based on Upper Tribunal guidance. Estimated for a flat worth £200,000 once the lease is extended, with £100 ground rent rising by £100 for each 33 years of the term. These are just estimates and can vary wildly – they are not a substitute for valuation advice. (1) This includes your valuation, negotiation and legal fees, as well as your freeholder's valuation and legal fees. It does NOT include any stamp duty cost.

Typical cost to extend a lease on a £500,000 flat by 90 years

LEASE LENGTH	EXTENSION COST	PROFESSIONAL FEES (1)	TOTAL	POTENTIAL ADDED VALUE
90 years	£8,300	£4,000	£12,300	£31,000
85 years	£10,500	£4,000	£14,500	£36,500
79 years	£30,500	£4,000	£34,500	£42,500
70 years	£46,000	£4,000	£50,000	£58,000
60 years	£67,500	£4,000	£71,500	£78,000
Extension costs and added value from Homehold, based on Upper Tribunal guidance. Estimated for a flat worth £500,000 once the lease is extended, with £100 ground rent rising by £100 for each 33 years of the term. These are just estimates and can vary wildly – they are not a substitute for valuation advice. (1) This includes your valuation, negotiation and legal fees, as well as your freeholder's valuation and legal fees. It does NOT include any stamp duty cost.

As the tables demonstrate, the cost of extending a lease rockets once a lease drops below 80 years in length. The difference between extending a lease 85 years in length and one 79 years in length can be in excess of £8,000.

To explore in more detail how much it might cost to extend your lease, the Leasehold Advisory Service website has a handy calculator that can give you an estimate.

Beware of 'informal deals'

Lots of freeholders will encourage you to extend your lease informally with a promise of a cheaper and quicker deal.

They do this because it provides them with an opportunity to increase your lease only by a small number of years, say, back up to 99 or 125 years. This could mean you having to extend your lease again in the future.

While freeholders are banned from using informal lease extensions to increase the level of ground rent you pay, they can still introduce other nasty charges to your lease. These could include paying a fee whenever you want to remortgage, let or sell your property – possibly even charging to keep a pet.

Often, your freeholder will start by asking you to pay a fee for a quote – usually between £100 and £1,000. Unless your freeholder is willing, you might struggle to negotiate the price of this fee, and you'll likely be required to pay it up front.

You'll also be required to cover at least part of the freeholder's legal fees (not to mention your own). If the terms of the informal lease extension are too onerous and you decide to pull out, you could find that you've spent a lot of money for nothing in return. At the very worst, if you do go ahead, these informal deals can make your property unsellable.

Don't fall into this trap!

How to pay for it

Hopefully, extending your lease will ultimately add value, but don't take out credit cards or loans to do it.

You may be able to borrow more on your mortgage to pay for it, but if you're considering this then it might be better to wait until your introductory deal (for example, if you're on a two-year fix) has come to an end first so that you can more easily review your entire borrowing and avoid any potential early repayment charges.

If you can't wait for your current deal to end you could opt for a further advance from your current lender, but this additional borrowing will likely be on a different rate from your main mortgage.

Step-by-step guide to extending your lease under the current rules

The lease extension process can go slower than a year in prison, so if you're thinking of selling your home, start early. Though it's worth noting that the clock stops ticking once you serve notice to extend your lease, so if you serve it at 80 years, the lease won't tick down to 79.

Just a note that in this guide, the word 'freeholder' means the person to whom flat-owners pay their service charge (otherwise known as the 'landlord'). Sometimes landlords pay rent to an even bigger company that owns the freehold and is legally known as the 'freeholder'. We've chosen to use the word 'freeholder' instead of 'landlord' in all cases to avoid confusion.

Step 1: Find a solicitor

The lease extension process can be long, complicated and contentious – it is well worth having professional support throughout the process. A good place to start is the Association of Leasehold Enfranchisement Practitioners website, which lists solicitors specialising in the field.

A solicitor will usually direct you to find a separate valuer to do certain bits of the process, but there are companies that manage the entire process (including legals and valuation) from start to finish, such as Homehold.

There can be huge cost differences between different conveyancers, so ensure you test the market. The less the freeholder tries to drag it out, the cheaper your legal costs.

And remember that these professionals needn't be based nearby. If you live in an expensive city such as London, out-of-town professionals could be much cheaper. Ask them how much experience they have working in leasehold and whether their fee is fixed or an estimate.

Step 2: Value the lease

Professional valuation advice is crucial. A specialist valuer will give the best indication of what you should pay for the lease extension and crucially build up a solid base of evidence with which to negotiate with your freeholder.

You should use the same valuer to negotiate with your freeholder as well – they'll have collected the evidence so will be able to negotiate most effectively.

Again, the Association of Leasehold Enfranchisement Practitioners website is a good place to find a valuer, but if you'd prefer a more integrated service that includes a solicitor and valuer then Homehold is an option.

Lease extension valuations typically cost about £400 to £900, and unlike a valuation for the purpose of marketing or mortgaging the property, they're usually done remotely.

Step 3: Negotiate the price

Negotiations will start by a formal notice being served with your opening offer of what you want to pay for your lease extension.

The freeholder will now ask for a deposit. This will be 10% of the lease cost stated in the notice or £250, whichever is greater.

At this stage, the freeholder will hopefully accept your offer. If not, they'll come back with a counter offer, and your solicitor will hand back to your valuer to negotiate back and forth with the freeholder.

Step 4: If you can't agree, you can apply to a tribunal

If you and the freeholder are in a stand-off over the price of the lease extension, you can apply to a First-Tier Tribunal to have the matter settled. Your legal and valuation fees will always be much higher if you go to the First-Tier Tribunal but the freeholder will have to incur these costs too. This is why it is so unusual to go this far.

Once you apply, you usually need to wait about four months for a hearing and usually it is your valuer who will make your case. After that, the First-Tier Tribunal simply writes to you to say how much it's decided you'll pay for the extension.

The Tribunal Service publishes lists of past First-Tier Tribunal lease extension decisions, though you will have to be dedicated to wade through the legal jargon.

Here are a couple of Q&As on extending your lease. If you've further questions, please add them to the Extend Your Lease discussion.

What if I can't find the freeholder?

As long as the property is registered, for a small fee, you can access the title summary, part of the official documents held at the Land Registry, and inspect copies of the entry relating to the freehold.

This should give you all the details you need to track down the freeholder who can grant the lease extension – your solicitor will help with all this. You can also try to find their details via rights to information under landlord and tenant legislation.

If, despite your best efforts, you are unable to locate the freeholder, your solicitor can apply to the county court for an order that means you can extend the lease. You'll need to prove to the court that you did your best to try to track them down. Once you've done this you'll be able to get the price fixed at a First-Tier Tribunal.
Can you profit from flats with super-short leases?

The shorter the lease, the cheaper the property. Some properties with super-short 20-40 year leases sell at bargain basement prices. It's more common in swanky parts of London.

However, as we've said, if you've owned the property for two years, you've a legal right to extend the lease. Extending short leases is pricey – we're talking tens of thousands – but sometimes the combined cost of the cheap property and the lease extension adds up to less than you could flog it for once it has a lease which has been extended by 90 years.

It also means that you could end up paying less stamp duty too.

Who can do this?

Though occasionally lucrative, this technique is tricky. You'll need to be a cash buyer looking for an investment, as it'll be nigh-on impossible to get a mortgage on a short-lease property.

This is an advanced way investors make cash from buying and selling properties. Many people who do this are ex-solicitors and accountants; you can get burned if you don't know what you're doing.

How it works

A quick tip to find short-lease properties is to pop the following into Google: site: rightmove.co.uk "short lease".

You'll then need to seek valuation advice on how much it will cost to extend (the leasehold calculators won't work below 60 years). Excellent valuation advice is a must.

Leases with less than 70 years left to run should be approached with caution. Worst-case scenario is that you are left with a lemon, a short leasehold property that you can't afford to extend the lease on. As the lease shortens, the flat's appeal to potential buyers reduces.

Further help & advice

The Leasehold Advisory Service has a wealth of free advice on leasehold law, including service charges, extending your lease, buying the freehold, right to manage and applying to the First-Tier Tribunal. You can also get advice in person or arrange a 15-minute telephone appointment.

Another useful source of info is the Government's Leasehold webpages.