If you own a leasehold property, or you’re thinking of buying one, understanding lease extensions is essential. The rules can feel complex, but with the right guidance — and a clear plan — you can avoid unnecessary stress, costs, and delays.
Just like in web development, timing, structure, and professional input can make all the difference. Here’s your guide to lease extensions explained in 2025.
1. What Is a Lease Extension?
When you buy a leasehold flat, you’re buying the right to live there for a set number of years. This is known as your lease term.
As the current lease runs down — especially once it drops below 90 or 80 years — it affects your property’s value, your ability to remortgage, and your negotiating power. A lease extension increases the number of years left, often creating a new lease, and gives you more long-term security.
A long lease is generally one originally granted for more than 21 years. As your lease shortens, so do your options. If the lease term falls below 80 years, additional costs like marriage value will apply.
2. Why It Matters
Letting your lease term run low can result in:
- Lower property value
- Difficulty getting a mortgage
- Higher costs due to marriage value
- Loss of negotiating position
Some of these issues reflect trends in the local property market, where shorter leases make homes less desirable.
3. The Statutory and Informal Routes
There are two ways of extending your lease:
- Statutory route: A legal process known as the statutory lease extension process, part of the broader statutory process. You gain 90 extra years and your ground rent payable is reduced to zero.
- Informal lease extension: A direct agreement with your freeholder. It can be faster but often includes existing clauses relating to increasing ground rent.
To begin the statutory route, you serve an initial notice or tenant’s notice, and your freeholder must reply with a counter notice or landlord’s counter notice. If the matter can’t be resolved, it may proceed to the county court or the First-tier Tribunal.
4. Who Qualifies and What It Costs
To use the statutory route, you must meet specific tenant legislation and qualifying criteria:
- You must own a residential property
- You must have held the lease for at least two years
- The lease must be a long lease, originally granted for more than 21 years
Costs include:
- Premium payable for the extension
- Valuation fees and valuation costs (determined by a qualified valuation surveyor, based on the valuation date)
- Own legal fees, professional fees, and your landlord’s reasonable costs
- Any own costs associated with disputes
Use a lease extension calculator as a starting point, but always seek professional advice or instruct professional advisers for an accurate valuation.
5. Lease Renewal vs Extension
A lease renewal typically applies to business or commercial lease or commercial lease agreements and may follow different legal processes. For residential leaseholders, you are usually extending a lease, not renewing it. The distinction matters when working with solicitors.
6. What About Leasehold Reform?
The UK government has proposed changes under leasehold reform housing, leasehold reform, and broader housing and urban development legislation. These include plans to simplify the lease extension process and remove ground rent payable entirely. However, as of 2025, these are not yet law.
While you may hear about the Urban Development Act, Urban Development Act 1993, or proposals to reform housing and urban leasing structures, the current legal path remains the statutory one — so don’t delay action waiting for reforms.
7. Special Cases
Some properties may be subject to intervening or head leases, where there’s a middle landlord (or immediate landlord) between you and the freeholder. These cases are more complex and typically require expert support.
Your solicitor may also need to update the land registry once your extended lease or new lease is granted. This helps protect your leasehold interest.
In rare cases, leaseholders may only own one unit or only property in a block, which can affect negotiations.
8. Final Thoughts
A lease extension protects your home’s value and ensures future flexibility. Whether you’re early in the process or your lease term is approaching a critical point, now is the time to act.
Just like in web development, ignoring structural issues can lead to bigger problems down the line. A proactive approach — with the right professional advisers — will give you peace of mind.
Frequently Asked Questions (FAQ)
Q: What’s the difference between lease extension and lease renewal?
A: Lease extension applies to residential property leaseholders. Lease renewal usually refers to business or commercial lease agreements.
Q: Will leasehold reform change the process soon?
A: Proposals exist, but changes under leasehold reform housing and housing and urban development are still pending. Proceed under current laws.
Q: Do I need to register the new lease?
A: Yes. After completing the process, your solicitor will typically update the land registry.
Q: What if the freeholder ignores the tenant’s notice?
A: You can apply to the county court or First-tier Tribunal for resolution.
Q: What’s the valuation date?
A: The valuation is based on the date the tenant’s notice is served. This sets the basis for calculating the premium payable.
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