Lease Extension Solicitor

What is a Lease Extension

A lease extension is a process where leaseholders can extend the term of their lease by 90 years in exchange for a premium paid to the freeholder. Governed by the Leasehold Reform Housing and Urban Development Act 1993, this gives leaseholders the legal right to extend their lease. Lease extensions can be complex and require specialist advice from lease extension solicitors. Understanding the lease extension process and costs (including legal and valuation costs) is key. Extending your lease increases the value of your property and reduces ground rent, long term financial benefits.

What is a Lease Extension

If you own a leasehold property you don’t own the land it’s built on — only the right to occupy it for a fixed term. Once that term shortens your property’s value and marketability suffers. Especially with a short lease, anything under 80 years.

A lease extension adds years to your lease and gives you long term security. This is important if you’re staying in your property, selling it or remortgaging. Extending a lease keeps the value of a residential property, reduces ground rent (sometimes to zero) and avoids paying a higher premium later. Many leaseholders ask “How do I extend my lease?” and it’s important to act before the lease drops below 80 years to avoid extra costs.

Why Lease Length Matters

When the lease drops below 80 years you may have to pay marriage value. This can add thousands to your lease extension premium — the lump sum paid to the freeholder to extend your lease.

The shorter the lease the higher the premium, so it’s best to avoid the pitfalls of a short lease. That means delaying could cost you thousands. Mortgage lenders may also refuse to lend on short leases making it harder to sell or refinance your home.

That’s why it’s often best to extend your lease sooner rather than later.

Benefits of Extending Your Lease

Extending your lease can have many benefits including increasing the value of your property, making it easier to mortgage and sell and reducing ground rent. A longer lease can also give you peace of mind and security for the future. Additionally extending your lease can prevent loss of ownership of the property when the lease expires. Leaseholders with a short lease (less than 80 years) may find it difficult to sell their property and extending the lease can make it more attractive to potential buyers. It’s important to seek specialist advice from lease extension solicitors to understand the benefits and costs of extending your lease.

How Lease Extension Solicitors Can Help

A specialist lease extension solicitor deals with the legal aspects of the process and looks after your interests throughout. Their role includes:

• Checking eligibility – You must have owned the leasehold property for at least 2 years before starting the statutory lease extension process.

• Advising on your options – Solicitors explain the pros and cons of the voluntary lease extension route versus the formal statutory route.

• Serving the Section 42 notice – This starts the statutory lease extension and sets out your proposed premium and terms.

• Responding to the counter notice – The freeholder has to respond with a Section 45 counter notice which may include a counter offer. Your solicitor will assess this and negotiate on your behalf.

• Working with a surveyor – Your solicitor will coordinate with your valuer to ensure the lease extension price is fair.

• Handling paperwork – They’ll make sure all documents are in order, registered with the Land Registry and submitted on time.

• Protecting your legal position – Deadlines in the statutory process are strict. A solicitor ensures your rights are preserved and your case isn’t deemed withdrawn due to missed steps.

Choosing specialist lease extension solicitors with experience in residential lease extensions gives you the best chance of a smooth cost effective outcome.

Lease Extension Solicitors and Ground Rent

Lease extension solicitors are key to the lease extension process to ensure leaseholders get a fair deal and the best outcome. Ground rent is a major consideration in lease extensions as it can be a big expense for leaseholders. The Leasehold Reform Housing and Urban Development Act 1993 allows for ground rent to be reduced to a peppercorn rent (a nominal amount) when a lease is extended. Specialist lease extension solicitors can help leaseholders navigate the complexities of ground rent and get the best deal.

Real World Example: Protecting Value Through a Lease Extension

Emma owns a 2 bedroom flat with 78 years left on the lease. She wants to sell in the next 2 years but her estate agent warns her that buyers and mortgage companies may be put off.

Emma’s solicitor advised her to serve a formal notice, known as a Section 42 notice, to start the statutory lease extension process. A surveyor estimated a £9,000 premium which was later negotiated down to £8,200. Legal fees, valuation costs and Land Registry charges were £2,000.

The process took 7 months. Her extended lease added 90 years to the term, reduced ground rent to zero and increased the value of the flat by nearly £15,000 — making it much easier to sell.

Statutory vs Voluntary Lease Extensions

There are two main ways to extend your lease:

• Statutory lease extension – This is a legal right under the Leasehold Reform, Housing and Urban Development Act 1993. You get a 90 year extension and pay no ground rent going forward. The freeholder must comply with a strict timeline.

• Voluntary lease extension – You negotiate directly with the landlord or freeholder, often referred to as the informal route. This can be quicker but there’s no standard format. The freeholder may offer fewer years or retain ground rent.

Leaseholders often seek legal advice to determine the best option. A solicitor will review the offer and highlight any lease extension terms that may cause problems later.

Extending a Lease with Collective Enfranchisement

Collective enfranchisement allows leaseholders in a block of flats to club together to buy the freehold of the building. This gives them more control over management and future decisions. While it can result in full ownership of the freehold, the process is legally complex and requires careful consideration of the premium, eligibility and cost sharing.

As with lease extensions, specialist legal advice is key to a successful outcome.

Lease Extension Timeline

Here’s how the statutory lease extension process works:

• Weeks 1–2: Instruct a solicitor and surveyor; check eligibility.

• Weeks 3–4: Receive the lease extension valuation and a rough estimate of costs, including the freeholder’s valuation.

• Weeks 5–6: Serve the Section 42 notice on the landlord.

• Within 2 months: Freeholder serves the counter notice.

• Months 3–5: Negotiate the lease extension premium and terms.

• If needed: Refer disputes to the First-tier Tribunal.

• Months 6–9: Agree terms, sign documents and register the new lease with the Land Registry.

The whole process can take 6–12 months depending on how quickly the freeholder responds and if there are any disagreements.

What are the Costs?

Extending a lease is more than just the premium. You’ll also need to consider:

• Lease extension premium

• Valuation costs – A surveyor determines the fair market premium and it’s essential to have a valuation done to ensure accuracy.

• Legal fees – Your solicitor will handle notices, negotiations and registrations.

• Freeholder’s costs – You’ll need to pay the freeholder’s reasonable legal and valuation costs too.

• Land Registry fees – These are paid to register your new lease.

• Other costs – Including serving notices, document searches and property management fees.

Your solicitor and surveyor will provide a breakdown of costs so you know what to expect.

How Lease Extensions Affect Property Value

Extending your lease protects and often increases the value of your residential property. Here’s why:

• Properties with short leases may sell for 10–20% less than similar homes with long leases.

• A longer lease appeals to more buyers and mortgage lenders.

• The cost of extending rises the longer you wait — act early to avoid paying a higher premium.Extending your lease can be a big property gain.

Choosing the Right Lease Extension Solicitor

Choosing the right lease extension solicitor is key to a smooth and stress-free lease extension process. Leaseholders should look for solicitors with plenty of experience in lease extensions, a deep understanding of the lease extension process and a track record of achieving fair outcomes for their clients.

For trusted advice speak to a solicitor with a background in lease extensions and a client focused service.

FAQs and Myths

Can I extend a lease if I’ve owned the property for less than two years?

No through the statutory process. However the seller can serve the Section 42 notice before the sale and assign the benefit to you.

Do I have to accept the freeholder’s valuation?

No. You can challenge it through negotiation or refer the matter to the First-tier Tribunal if needed.

What happens if I miss a deadline?

Your claim could be deemed withdrawn. That’s why it’s essential to work with a solicitor who manages the whole lease extension process and tracks every deadline.

Is it better to go for a voluntary lease extension?

It depends. Voluntary offers can be quicker but might include unfavourable lease extension terms or higher ground rent. Always seek legal advice before agreeing.

Can I extend if I have a mortgage?

Yes. Extending your lease can simplify the remortgage process and your lender will need to consent to the new lease. Your solicitor will arrange this.

What to Do Next

If your lease is 85 years or less now is the time to act. Here’s how to get started:

• Gather key documents including your lease and title details.

• Speak to a specialist lease extension solicitor for advice on residential leases.

• Book a valuation to get a rough estimate of the premium.

• Review your options and decide on the best route: statutory or voluntary.

Acting early can save you money, stress and protect your long term position as a leaseholder.

Conclusion

Extending a lease is a good idea if you want to maintain or increase the value of your leasehold property. Whether you’re staying put, selling or remortgaging, having a longer lease gives you peace of mind and flexibility. Get expert advice and peace of mind.

About The Author