Lease extensions explained: cost, the 80-year rule and the process
Extending your lease adds years back onto it and, through the formal route, reduces your ground rent to nothing. Most flat owners have a legal right to extend, and the single most important thing to know is the 80-year mark: once your lease drops below it, extending becomes markedly more expensive.
A lease is a wasting asset, so at some point most leaseholders need to deal with it. This guide explains what an extension costs, why timing matters so much, the difference between the formal and informal routes, and how the process works.
Key takeaways
- Through the statutory route, a flat owner can add 90 years to their lease and cut ground rent to a peppercorn.
- The 80-year mark is critical. Below it, an extra cost called marriage value pushes the price up.
- You no longer have to have owned the flat for two years before you can extend.
- There are two routes, statutory and informal, and they offer very different protections.
- Reforms promise cheaper, longer 990-year extensions, but they are not in force yet.
What is a lease extension?
A lease extension adds time to the lease on your home. Through the formal, statutory route, a flat owner can require the freeholder to add 90 years to whatever is left, so a flat with 85 years remaining becomes 175 years, and at the same time the ground rent is reduced to a peppercorn, meaning zero. You pay the freeholder a one-off sum, called the premium, for this. The right comes from the Leasehold Reform, Housing and Urban Development Act 1993. Leasehold houses have a separate right with different terms, so the rest of this guide focuses on flats. For the wider picture, see leasehold explained.
Why the 80-year mark matters
This is the part that costs people real money. While your lease is comfortably above 80 years, extending is relatively cheap. Once it falls below 80 years, an extra element called marriage value is added to the price. Marriage value is, roughly, the increase in the flat’s value created by extending the lease, and below 80 years the law currently requires that increase to be shared with the freeholder. The result is that crossing the 80-year line can add thousands of pounds to the cost.
The practical lesson from years of seeing this play out is simple. If your lease is anywhere near 85 years, get advice and act before it reaches 80, rather than after. People often discover the problem only when a buyer’s solicitor flags the short lease during a sale, which is the worst time to find out, because you are then negotiating under pressure.
How much does a lease extension cost?
There is no single figure, because the premium depends on your flat’s value, how many years are left, the ground rent, and whether marriage value applies. As a rule of thumb the cost rises sharply as the lease gets shorter, and it jumps once you go below 80 years. On top of the premium you pay your own surveyor and solicitor, and under the current rules a contribution to the freeholder’s reasonable costs as well.
Because so much turns on the specifics, the essential first step is a valuation from a surveyor who specialises in lease extensions. A specialist valuation tells you what a fair premium looks like before you commit, and gives you the figure to negotiate from. Treat it as money well spent rather than an optional extra.
Statutory versus informal extension
There are two ways to extend. The statutory route is the legal right described above: 90 added years, peppercorn ground rent, and a process with deadlines and the backstop of a tribunal if you cannot agree the price. It is more formal but it protects you, because the freeholder cannot simply impose unfair terms.
The informal route is a private deal with the freeholder. It can be quicker and cheaper, and a freeholder may offer it, but it comes with a warning. Informal terms are whatever you agree, which means a freeholder might add fewer years, or keep a ground rent in place, or include terms that do not suit you. Always compare an informal offer against what the statutory route would give you before accepting, and take advice, because a cheap-looking informal deal can be worse value than it appears.
How the process works
For a statutory extension the broad steps are: get a specialist valuation; serve a formal notice on the freeholder setting out your claim and proposed premium; the freeholder responds with a counter-notice, usually with a higher figure; you negotiate; and you complete the new lease. If you cannot agree the premium, either side can ask the First-tier Tribunal (Property Chamber) to decide it, which is a routine part of the process rather than a disaster. From start to finish it commonly takes several months, longer if the price is disputed. A specialist solicitor and surveyor are strongly advisable, because the notices and time limits are strict.
Do you qualify?
Most leaseholders of flats qualify. You need to hold a long lease, meaning one originally granted for more than 21 years. Helpfully, you no longer have to have owned the flat for two years before you can extend, a requirement that was abolished at the start of 2025, so you can begin much sooner than used to be the case. There is no longer a residence test either. As a practical point, you will usually need to wait until your purchase is registered before you can serve the formal notice.
How reform will change it
The reforms aim to make extending dramatically better for leaseholders. The headline changes are a move to 990-year extensions instead of 90, the abolition of marriage value so short leases become much cheaper to extend, a cheaper way of calculating the premium, and an end to paying the freeholder’s costs. For someone with a lease already below 80 years, the abolition of marriage value in particular could save a lot.
The crucial point is that none of these changes are in force yet. They need detailed regulations, parts are subject to legal challenge, and the timing is genuinely uncertain. So if you have a short lease today, do not assume the cheaper rules will arrive before you need to act, especially if you are trying to sell. Decide based on the rules as they are now, and watch the position through our leasehold reform tracker.
Frequently asked questions
Should I wait for the reforms before extending?
If your lease is comfortably long and not near 80 years, waiting may cost you little. If it is near or below 80 years, waiting is a gamble, because the cheaper rules are not in force and may not arrive in time, while marriage value keeps adding to the cost as the lease shortens. Take advice on your specific lease before deciding.
Does extending get rid of my ground rent?
Through the statutory route, yes. The new lease is granted at a peppercorn ground rent, so it removes the ground rent entirely. This is one reason an extension can be worth it even when the remaining term is not especially short. See our ground rent guide.
What is the difference between extending and buying the freehold?
Extending lengthens your own lease. Buying the freehold, through collective enfranchisement, means you and your neighbours own the building outright. Enfranchisement gives more control but costs more and needs several leaseholders to act together.
Can the freeholder refuse to extend my lease?
Not if you use the statutory route and you qualify. The right is backed by law, and if the freeholder will not agree a fair premium the tribunal can set it. A freeholder can decline an informal deal, but they cannot block a valid statutory claim.
What to do next
Find out exactly how many years are left on your lease, because that single figure drives everything. If it is heading towards 85 years, treat that as your prompt to get a specialist valuation rather than waiting. Compare any informal offer from your freeholder against the statutory route before accepting it. And if your wider concern is the building’s management or you want to end ground rent across the whole block, look at buying the freehold as the alternative.
This guide provides general information about extending the lease on a flat in England and Wales. It is not legal advice, and lease extension is a technical area where specialist help is strongly advisable. For advice on your own situation, consult a solicitor and surveyor who specialise in lease extensions, or a specialist such as the Leasehold Advisory Service (LEASE). Sources: Leasehold Reform, Housing and Urban Development Act 1993; Leasehold and Freehold Reform Act 2024; draft Commonhold and Leasehold Reform Bill (2026); LEASE and GOV.UK guidance. Last reviewed [date]; reviewed whenever the law changes.