Leaseholders in England and Wales have a statutory right to extend their lease by 990 years at zero ground rent under the Leasehold and Freehold Reform Act 2024. The Act, which received Royal Assent in May 2024, significantly strengthens leaseholder rights and removed the previous 2-year ownership requirement in many cases.
| Key fact | Detail |
|---|---|
| New standard extension | 990 years (previously 90 years added to unexpired term) (Source: Leasehold and Freehold Reform Act 2024) |
| Ground rent after extension | Reduced to zero (peppercorn) for all statutory extensions |
| Marriage value | Abolished for statutory extensions — no longer payable when lease is below 80 years |
| 2-year ownership rule | Abolished under the 2024 Act — you can extend immediately after purchase |
| Lease below 80 years | Significantly harder to mortgage and sell — extension becomes urgent |
Why Extending Your Lease Matters
A lease below 80 years causes two major problems. First, most mortgage lenders require a lease to have at least 70-85 years remaining after the end of the mortgage term — so on a 25-year mortgage, a lender may require 95 years or more. Second, once a lease falls below 80 years, marriage value becomes payable (though this is abolished for statutory extensions under the 2024 Act, informal extensions still carry negotiated premiums). Every year you delay, the extension premium increases.
The 2024 Act Changes — What Is Now Different
The Leasehold and Freehold Reform Act 2024 made several significant changes to how lease extensions work in England and Wales:
- 990-year extension — replaces the previous system of adding 90 years to the unexpired term. A flat with 75 years remaining becomes a 990-year lease after extension
- Marriage value abolished — previously, if your lease was below 80 years, freeholders could demand marriage value (typically 50% of the increase in property value from the extension). This is now zero for statutory extensions
- 2-year ownership requirement removed — you no longer need to have owned for 2 years before exercising your right to extend. You can extend the day after completion
- Leaseholder pays freeholder costs — you still pay the freeholder's reasonable legal and valuation costs under a statutory extension
Note: As of mid-2026, secondary legislation implementing parts of the 2024 Act is still being completed. Check the government's leasehold reform page at gov.uk for the latest commencement dates. (Source: DLUHC, Leasehold Reform updates 2025-2026)
How to Serve a Section 42 Notice Yourself
A Section 42 Notice (under the Leasehold Reform, Housing and Urban Development Act 1993) is the formal trigger for a statutory lease extension. You can serve it yourself but most leaseholders use a solicitor to avoid errors that invalidate the notice.
- Find your freeholder — check the Land Registry title register for your building (£3 at gov.uk). The notice must be served on the correct legal owner
- Get a leasehold valuation — instruct a RICS-registered leasehold valuer to calculate the premium before you serve notice. You must include a proposed premium in the notice
- Serve the notice — must be in writing, include the proposed premium, your solicitor's details, and a minimum response period of 2 months for the freeholder to respond
- Freeholder serves counter-notice — within 2 months they must accept or reject your right, and propose their own premium if accepting in principle
- Negotiate premium — valuers negotiate. If no agreement after 6 months from counter-notice, either party can apply to the First-tier Tribunal (Property Chamber)
- Complete the extension — solicitors complete the deed of variation adding the new term to your lease
How Much Does a Lease Extension Cost?
The premium you pay the freeholder is calculated using the Leasehold Reform Act formula, which considers: the ground rent, the unexpired term, and the property value. Marriage value is now zero under the 2024 Act for statutory extensions.
| Unexpired term | Typical premium (£250k flat) | Notes |
|---|---|---|
| 90 years | £3,000-£6,000 | Low premium — consider extending now |
| 80 years | £8,000-£15,000 | Marriage value trigger point under old rules |
| 70 years | £15,000-£25,000 | Mortgageability becoming an issue |
| 60 years | £25,000-£40,000 | Urgent — some lenders will not lend |
| Below 50 years | £40,000+ | Very expensive and potentially unsaleable |
Add to this your own legal costs (£1,500-£3,000), your valuer's fees (£500-£1,500), and the freeholder's reasonable costs which you must pay (typically £1,000-£2,000 in legal and valuation fees). (Source: Leasehold Advisory Service cost estimates, 2025)
Informal Lease Extension vs Statutory Route
You can also negotiate informally with your freeholder without serving formal notice. This can be faster and cheaper if your freeholder is cooperative, but you have no legal protection on the terms, the premium or the timescale. An informal extension can include ground rent (statutory extensions set it to zero), and the term can be any agreed length. Use a solicitor for any informal extension — the wording must be correct or you could end up with a worse position than before.
The First-tier Tribunal Route
If you and the freeholder cannot agree on the premium within 6 months of the freeholder's counter-notice, either party can apply to the First-tier Tribunal (Property Chamber) to determine the premium. Tribunal costs are typically £300-£600 to apply, plus the cost of your expert witness (valuer) at the hearing. The tribunal is independent and sets a binding premium. Most cases settle before the hearing once both parties see the strength of the other's case. (Source: HM Courts and Tribunals Service)
This article is for information only and does not constitute financial or legal advice. Consult a qualified adviser for guidance tailored to your situation. Check the FCA register at register.fca.org.uk before dealing with any financial firm.
Frequently Asked Questions
Can I extend my lease if I have a mortgage?
Yes, but you need your mortgage lender's consent to serve a Section 42 Notice. Most lenders grant this as a matter of course since extension increases the property's value. Your solicitor will write to the lender as part of the process.
Can a freeholder refuse a statutory lease extension?
No. If you qualify under the 1993 Act (as amended by the 2024 Act), the freeholder cannot refuse your right to extend. They can only dispute the premium. The only grounds to oppose are if they intend to redevelop the property and can demonstrate this to the tribunal.
How long does a lease extension take?
From serving the Section 42 Notice to completion typically takes 3-12 months depending on how quickly negotiations progress. If the case goes to the First-tier Tribunal, add 6-12 months. An informal extension can complete in 4-8 weeks if both parties agree quickly.
Does extending my lease increase my service charge?
No. The service charge is separate from the lease term and is set by the terms of your lease and the costs of managing the building. Extending your lease does not change service charge obligations.
What happens if I sell before extending?
You can assign your Section 42 Notice to a buyer if you have already served it. The buyer effectively steps into your shoes and continues the process. If you have not served notice, the 2-year rule no longer applies under the 2024 Act, so a buyer can extend immediately after purchase.
Sources
- Leasehold and Freehold Reform Act 2024: legislation.gov.uk
- Leasehold Reform, Housing and Urban Development Act 1993: legislation.gov.uk
- Leasehold Advisory Service: lease-advice.org
- HM Land Registry title register: gov.uk
- First-tier Tribunal Property Chamber: gov.uk
