Extending your lease can be vital to ensure your flat remains mortgageable and marketable. We have particular expertise in this area, which means we can advise you on the most efficient and cost-effective way of dealing with the problem.
We can also follow the lease extension by acting for you on a sale of the property, or deal with a sale while the lease is being extended by transferring the benefit of the extension claim to your buyer to complete.
Why do leases need extending?
Owning a flat usually means owning a lease of the property, which has a finite term of years. Leases are often granted for 99 or 125 years, and if they were granted a long time ago the number of years remaining may now be getting low. At some point mortgage lenders may refuse to lend on the security of the lease. That does not just mean the property cannot be mortgaged: it means it cannot easily be sold, because most buyers need a mortgage.
Do I just ask my freeholder for a lease extension?
You can. This is what we call an informal, negotiated lease extension. The difficulty is that the freeholder is free to dictate the terms, so they may offer the minimum number of extra years at the highest possible price, with a high ground rent and other changes that suit them rather than you. For this reason we frequently advise clients to follow the statutory procedure instead.
What is the statutory procedure?
The Leasehold Reform, Housing and Urban Development Act 1993 gives most long leaseholders of flats the right to a new lease. The requirement to have owned the flat for two years before claiming was abolished on 31 January 2025 by the Leasehold and Freehold Reform Act 2024, so you can now start the process as soon as you are the registered owner. Other qualifying criteria, while important, are nearly always met.
The procedure begins by serving a Section 42 notice on your freeholder, proposing the premium to be paid. The freeholder must respond by counter-notice within a set period. If the terms cannot be agreed within the statutory timetable, either party can apply to the First-tier Tribunal (Property Chamber) to determine them. A statutory lease extension gives you:
- an additional 90 years on top of your existing term under the current rules (the 2024 Act provides for 990-year extensions once the relevant provisions are brought into force);
- a ground rent reduced to a peppercorn, meaning nothing is payable;
- otherwise the same lease as before, subject to certain statutory modifications.
This means the freeholder is not entitled to impose new restrictions or make your lease more onerous than it was.
What if my freeholder ignores my Section 42 notice?
You apply to the County Court. The court will order that a new lease be granted on the terms stated in your notice. The freeholder must implement the order; if they do not, a further application is made for the court itself to execute the new lease.
What happens if I cannot locate my freeholder?
Again, an application is made to the County Court, this time for an order that you are entitled to a lease extension, that you may dispense with serving a notice on the freeholder, and that the terms of the new lease be determined by the First-tier Tribunal. You will need to show the court that reasonable efforts have been made to trace the freeholder. The court then refers the matter to the Tribunal to fix the premium, which is paid into court.
Acting for freeholders
We also act for freeholders and landlords who receive Section 42 notices, advising on the validity of the notice, the counter-notice and the premium, and representing them at the Tribunal where necessary. See leasehold portfolio management.
How do I proceed?
Contact us and we will talk you through the initial steps, the likely timetable and our costs. A specialist valuer’s advice on the premium is usually needed, and we can recommend valuers we work with regularly.
The law in this area is changing as the Leasehold and Freehold Reform Act 2024 is brought into force in stages. This page reflects the position at the date shown and we will update it as further provisions commence.