There is something uniquely unsettling about watching the number of years on a lease gradually fall. Nothing visible changes inside the flat, yet its value, mortgageability and appeal to future buyers may all begin to change with it.
Many flat owners in England and Wales have a legal right to extend their lease. The price, however, depends heavily on timing, and the formal process contains deadlines that should not be treated casually.
This guide explains when to consider extending, how the cost is calculated, the formal and informal routes, the Section 42 process and the leasehold reforms that have—and have not—yet changed the law.
Quick answer
A qualifying flat owner currently has the statutory right to add 90 years to the remaining lease term and reduce the ground rent to a peppercorn, meaning no financial rent. The former two-year ownership requirement has ended. However, marriage value remains payable where the lease has 80 years or fewer remaining when the formal Section 42 notice is served. The proposed 990-year extension and abolition of marriage value are not yet in force.
Contents
- Why and when should you extend a lease?
- What is the 80-year rule?
- How much does a lease extension cost?
- Who qualifies and what do they receive?
- The Section 42 lease-extension process
- Formal or informal lease extension?
- Extending when selling or buying
- Missing landlords, mortgages and share of freehold
- Leasehold reform: What has changed?
- Common questions
Why and when should you extend a lease?
A lease extension gives the leaseholder a longer legal interest in the property. Under the formal statutory route, the existing lease is ordinarily replaced by a new lease and the transaction is registered at HM Land Registry.
A lease is a diminishing asset. Every year that passes brings the date on which the property returns to the landlord one year closer. That can reduce the flat’s value and affect whether mortgage lenders are willing to lend against it.
There is no universal lease length accepted by every lender. Some look at the term remaining when the mortgage begins; others also require a specified period to remain when it ends. Statements such as “every lease above 90 years is safe” or “every lease below 70 years is unmortgageable” are therefore too simplistic.
There is no single right time to extend, either. Someone with 115 years remaining and no plans to sell may reach a different decision from someone with 84 years left who expects to move within three years. The term, likely premium, ground rent, mortgage requirements and future plans all matter. My separate guide considers whether a 125-year lease is long enough.
One lesson I took from years in legal practice is that a manageable issue can become far more stressful once it is tied to a live transaction. Lease length is a good example. It is often given little attention until a sale or remortgage is under way, when the owner is suddenly working around a buyer, lender and chain. I would be particularly cautious about allowing a lease to approach 80 years without first obtaining advice on the cost and timing of an extension.
What is the 80-year rule?
Under the law currently in force, marriage value forms part of the statutory premium where the lease has 80 years or fewer remaining on the valuation date. That date is generally the date on which the Section 42 notice is served.
If the lease has more than 80 years remaining when a valid notice is served, marriage value is not payable, even if the term falls below 80 while negotiations continue. If it has exactly 80 years remaining, marriage value does apply. Asking a solicitor or valuer to begin work does not stop the clock.
What is marriage value?
Extending a short lease will usually increase the flat’s value. Marriage value broadly represents the additional value created by combining the leaseholder’s existing interest with the landlord’s interest through the grant of the longer lease. Under the present statutory formula, the landlord receives 50% of that marriage value, in addition to the other elements of the premium.
The figure depends on valuation evidence and can vary greatly between properties. Sweeping online claims about how many thousands of pounds it will add are rarely useful. The government-funded Leasehold Advisory Service explains marriage value and the 80-year threshold in more detail.
How much does a lease extension cost?
There is no standard lease-extension price. Even two flats in the same building may produce different premiums if their leases have different commencement dates, ground rents or terms.
Under the present statutory rules, the premium can include compensation for the ground rent the landlord will lose, the delay in recovering possession when the lease ends (the reversion), marriage value where applicable and certain other losses caused by granting the new lease. The principal inputs include the flat’s value, the unexpired term and the amount and review pattern of the ground rent.
The Leasehold Advisory Service’s lease-extension calculator can provide an initial estimate for a flat, but it is not a substitute for a professional valuation. A Section 42 notice needs a defensible opening figure, while negotiations may turn on matters a simple calculator cannot assess.
Professional and other costs
The premium is only part of the budget. Under the law currently operating, a statutory claimant will normally pay their own solicitor and specialist valuer as well as the landlord’s reasonable legal and valuation costs of investigating the claim and granting the new lease.
The landlord cannot pass on every expense. Its recoverable statutory costs do not ordinarily include negotiating the premium or arguing the disputed amount before the tribunal. The leaseholder should also allow for the Land Registry fee, possible mortgage-lender charges and any Stamp Duty Land Tax in England or Land Transaction Tax in Wales.
After receiving the Section 42 notice, the landlord may demand a deposit equal to 10% of the premium proposed in the notice or £250, whichever is greater. That deposit is credited towards the eventual price; it is not an additional premium.
Who qualifies and what do they receive?
The formal right principally applies to qualifying tenants of flats under the Leasehold Reform, Housing and Urban Development Act 1993. The lease must usually have been granted originally for more than 21 years. It is the original term—not the number of years now remaining—that matters.
Since 31 January 2025, there has been no requirement to own the flat for two years before claiming. A new owner can generally start the process once registered as proprietor of the leasehold title.
Exclusions and special rules can apply to business tenancies, some charitable housing, shared ownership arrangements, Crown property and certain buildings or landlords. Eligibility should be checked before a formal notice is prepared.
A qualifying flat owner is currently entitled to 90 years added to the unexpired term and ground rent reduced to a peppercorn throughout the new term. A peppercorn has no financial value, although service charges, insurance contributions and other payments due under the lease remain payable.
The new lease is generally based on the existing one, with the changes required by the legislation and any other permitted modifications. If the existing lease contains defective wording or an inaccurate plan, separate changes may need to be negotiated. My guide to a deed of variation of a lease explains the wider options.
The Section 42 lease-extension process
The statutory route provides valuable protection, but it is not simply a form to send to the freeholder. The notice, valuation and timetable work together.
Preparing and serving the notice
The solicitor checks the lease and title, confirms eligibility and identifies the competent landlord—the person with a sufficiently long interest to grant the extension. A specialist valuer advises on the premium to propose.
The Section 42 notice then starts the claim and fixes the valuation date. It identifies the flat, states the proposed premium and terms, and gives the landlord at least two months to serve a Section 45 counter-notice. Because validity and service matter, an apparently small error can have consequences far beyond the legal fee saved by attempting the notice without specialist assistance.
The counter-notice and negotiations
The landlord may request evidence of title, arrange an inspection and demand the statutory deposit. Its counter-notice will generally admit or dispute the right to extend and either accept the proposals or put forward alternatives, commonly including a higher premium.
A substantial gap between the opening figures does not necessarily mean the case will reach a hearing. The valuers usually negotiate within that range. However, friendly discussions do not suspend the statutory timetable.
If terms remain unresolved, an application to the tribunal cannot ordinarily be made during the first two months after the counter-notice but must be made before six months have elapsed. In England, the First-tier Tribunal (Property Chamber) can determine the disputed premium or terms; in Wales, the equivalent body is the Leasehold Valuation Tribunal.
If the landlord fails to serve a counter-notice, the leaseholder can apply to the county court for an order granting the new lease, generally within six months of the missed deadline.
Completion and registration
Once the terms are agreed or determined, the new lease is completed, the relevant sums are paid and the transaction is registered. Any mortgage must be protected against the new title. Further deadlines apply after a tribunal decision, so reaching an agreed figure does not mean the timetable can be forgotten.
Formal or informal lease extension?
An informal extension is negotiated directly with the landlord. It can be quicker and less expensive if the landlord offers a fair premium, a suitably long term and reasonable conditions. The landlord is not obliged to do so: it can refuse, withdraw, offer fewer years or propose changes to other lease terms.
Under the Leasehold Reform (Ground Rent) Act 2022, a voluntary extension can generally preserve existing ground rent during the balance of the original term, while the extended period must be at a peppercorn. An informal extension therefore does not necessarily remove ground rent immediately. The government’s Ground Rent Act guidance explains this distinction.
The formal route gives a qualifying leaseholder a legal right to an additional 90 years, peppercorn ground rent and access to a tribunal if the price or terms cannot be agreed. Its disadvantages are procedural complexity, strict deadlines and the present obligation to pay specified landlord costs.
I would never compare the two routes solely by looking at the headline premium. A superficially cheaper informal offer may be substantially worse if it grants fewer years, preserves an onerous rent or introduces new restrictions. The term, rent, costs, timetable and every proposed amendment should be compared together.
Extending when selling or buying
A short lease often becomes urgent only after a buyer has been found. That can put the seller under pressure to accept whichever solution appears quickest.
A seller who has served a valid Section 42 notice can generally assign its benefit to the buyer when the flat is transferred. The documents must be coordinated carefully: if the benefit is not assigned at the same time as the lease, the claim may not pass as intended.
Because the two-year rule has ended, a buyer can instead begin a new claim once registered as owner. Registration is not always immediate, however. Where the lease is close to 80 years or an existing claim is well advanced, assignment may still provide valuable certainty.
Completing an extension before marketing can make the flat easier to value, mortgage and sell, but requires the owner to fund the premium and wait for completion. There is no universally correct sequence; the lease length, finances and transaction timetable all matter.
Missing landlords, mortgages and share of freehold
A missing freeholder does not necessarily prevent a statutory extension. After reasonable tracing efforts, the leaseholder may apply to the county court for a vesting order, with the tribunal usually determining the premium. One unanswered letter is unlikely to prove genuine absence. My absent landlord guide explains the procedure.
If a freehold-owning company has been dissolved, the freehold may instead have passed to the Crown as bona vacantia or subsequently been disclaimed. That requires a different investigation, covered in my guide to bona vacantia property.
A mortgaged lease can be extended, but the lender’s charge must be dealt with and the lender may charge a fee. Similarly, owning a share of the freehold does not make the lease irrelevant: the flat remains leasehold. Co-freeholders may agree to grant long leases for little or no premium, but the documentation, lender consents and registration still matter. They may also consider collective enfranchisement.
What about leasehold houses?
Houses are governed by a different regime under the Leasehold Reform Act 1967. Under the law currently operating, a qualifying house leaseholder may have a one-time right to a 50-year extension. No premium is payable for the additional term, but a modern ground rent becomes payable during it. Buying the freehold is often considered as an alternative. My leasehold house guide explains this separate regime.
Leasehold reform: What has changed?
This area is unusually easy to misunderstand because important reforms have received Royal Assent without all having taken effect.
The two-year ownership requirement ended on 31 January 2025. However, the Leasehold and Freehold Reform Act 2024 also contains provisions for a 990-year statutory extension, abolition of marriage value, a cap on ground rent for valuation purposes and a move towards each party paying its own process costs. Those changes are not yet in force.
A qualifying flat owner claiming now therefore receives 90 additional years, marriage value remains payable at 80 years or fewer, and the leaseholder should continue to budget for the landlord’s reasonable statutory legal and valuation costs.
On 15 July 2026, the government opened consultations on the valuation rates and cost rules needed to implement significant parts of the Act. Its valuation-rates consultation and process-costs consultation explain the proposed approach.
Should you wait for the reforms?
There is no risk-free answer. Waiting may eventually provide a longer extension, remove marriage value or reduce liability for the landlord’s costs. Against that, the commencement date and financial effect are not yet certain, while the lease continues to shorten.
Someone with a long lease may have time to observe developments. A lease approaching 80 years requires much greater caution because marriage value still applies under current law. The sensible comparison is between the estimated cost and certainty of acting now and the risks of waiting—not between current law and an assumed best-case version of future reform.
Common questions
Can a freeholder refuse an extension?
A freeholder can refuse an informal request. It cannot ordinarily refuse a valid statutory claim where the leaseholder and lease qualify, although exclusions and limited redevelopment provisions can apply.
How long does a lease extension take?
Many claims take several months. A straightforward agreed extension may complete sooner, while a disputed valuation, missing landlord or tribunal case can take considerably longer. Six to twelve months may be a useful planning range in some cases, but it is not a guarantee.
What happens if the price cannot be agreed?
Under the statutory route, either party can apply to the relevant tribunal within the prescribed window. The tribunal can determine both the premium and disputed lease terms.
Does a share of freehold mean the lease does not matter?
No. The flat is still held under its lease. The co-freeholders may be able to grant longer leases by agreement, but the transaction must still be properly documented and registered.
Making the timing decision
Lease extension is not a reason to panic, but it is a poor issue to ignore. Its consequences often build quietly: another year disappears, the premium changes, a lender’s policy becomes relevant or a buyer asks a question that could have been considered much earlier.
My practical starting point would be to establish the exact unexpired term, obtain a realistic valuation and compare the statutory entitlement with any informal offer. Once those facts are known, the decision usually becomes much clearer.
Above all, keep the 80-year threshold precise. It is not “somewhere around 80”, and it is not measured when negotiations finish. Under current law, marriage value depends on whether more than 80 years remain when the valid Section 42 notice is served.
Last legally reviewed: 21 August 2026
This guide is based on general principles of English and Welsh law, is intended for informational purposes only, and does not constitute legal advice or establish a professional relationship.
