If your lease is getting shorter, extending it can be an important step to protect your property's value and future saleability. For leasehold flats in England and Wales, you may have the legal right to extend your lease by 90 years and reduce the ground rent to zero under the 1993 Act. Leasehold houses follow a separate process with different rules.
In this guide, we walk you through the lease extension process from start to finish including choosing a valuer and solicitor, serving the required notices, negotiating the terms, and completing your new lease. We also cover the key 2026 changes, expected timelines, costs, and what to consider before starting the process.
Why Extending Your Lease Matters: The Key Risks of Doing Nothing
Delaying a lease extension can cost you significantly, both financially and in terms of your property's saleability.
Your Property Becomes Harder to Sell and Re-mortgage
Most high street lenders will not mortgage properties with fewer than 70 to 85 years remaining at the end of the mortgage term. So even with 75 years left on your lease, a buyer seeking a 25-year mortgage could be turned away outright, shrinking your buyer pool and reducing your property's market value.
The Critical 80 Year Threshold
The 80-year threshold is a key point in the lease extension process. According to the Leasehold Reform Act 1993, when your lease falls below 80 years, marriage value comes into play. This is an additional cost you will need to pay when extending your lease, and it can significantly increase your premium.
What is Marriage Value?
Marriage value is the 50% increase in your property’s value created by extending the lease. This cost is added to your extension premium and typically runs into thousands of pounds. The marriage value arises because, with a lease under 80 years, your property’s value is reduced due to the shorter lease term, and extending it restores its market value.
Why Does the 80-Year Mark Matter?
If your lease has fewer than 80 years remaining, you will be liable for marriage value, which directly impacts the cost of your lease extension. Here’s why this is crucial:
- With 80 years or more: You only pay the premium for extending the lease, which covers the loss of ground rent and the delay in reclaiming the property.
- Under 80 years: Marriage value adds an additional cost of up to 50% of the increase in property value due to the extension. This can raise the total cost of your extension by several thousand pounds.
Example: The Impact of Marriage Value
If your property is valued at £300,000 and you are extending your lease, the value might increase by £50,000 after the extension. In this case, the marriage value would be 50% of £50,000, which equals an additional £25,000 added to the extension premium.
Why Acting Early is Crucial:
By acting before your lease falls below 80 years, you can avoid the added cost of marriage value. For example, if your lease has 82 years remaining, acting now could save you thousands compared to waiting until the lease is below 80 years.
The 2026 Legal Landscape: What Has Changed and What Has Not
There has been a lot of news about leasehold reform. Here is a clear summary of what the law is right now and what is still being decided.
What Has Already Changed
The Leasehold and Freehold Reform Act 2024 became law on 24 May 2024.The biggest change so far is that you no longer must wait two years after buying your property before applying to extend your lease. This change came into force on 31 January 2025, so you can now apply as soon as your name is registered at HM Land Registry.
What Has Not Changed Yet
The Leasehold and Freehold Reform Act 2024 has been passed into law, but many of its key provisions, such as 990-year lease extensions and the abolition of marriage value, are not yet in force. These changes require further consultation and the establishment of new regulations before they can be implemented. While legal challenges and ongoing policy discussions may influence the timeline, the exact date for these provisions to take effect remains uncertain.
What This Means for You in 2026
The existing rules from the 1993 Act still apply today. There is no guarantee the new rules will work out cheaper for you than the current ones. If you need to sell, re-mortgage, or your lease is getting close to 80 years, it is worth speaking to a specialist now rather than waiting for reforms that may still be years away.
Who Qualifies for a Statutory Lease Extension?
Before starting the process, it is important to check that you meet the eligibility rules set out in the 1993 Act.
Own a long lease, meaning a lease that was originally granted for more than 21 years. It does not matter how much time is left on the lease now as it is the original length that counts.
Be the registered owner at HM Land Registry. You no longer need to have owned the property for two years before applying. This rule was removed on 31 January 2025, so you can apply as soon as your name appears on the register.
Not Sure If You Qualify?
Eligibility can sometimes be complicated. Let our experts check for you.
The Lease Extension Process: Step by Step
Step 1 - Check Your Lease Length and Decide Whether to Act Now
Start by finding out exactly how many years remain on your lease. Your solicitor can get this from your title register at HM Land Registry for a small fee, or you can search yourself at gov.uk
Once you know your lease length, where you stand matters greatly. If your lease has fewer than 80 years remaining, act without delay as marriage value is already in play and every year lost increases the cost. If you have between 80 and 85 years left, begin the process soon to avoid falling below the critical 80-year mark during negotiations. If you have more than 85 years remaining, you have more flexibility, though it is still worth taking independent advice on whether waiting for forthcoming reforms could affect your premium.
Step 2 - Instruct a Specialist Leasehold Valuer
Your first practical step is to appoint a specialist surveyor with experience in leasehold valuations. A general estate agent or standard surveyor is not suitable for this work.
The surveyor will calculate the premium you are likely to pay the freeholder. The premium compensates the freeholder for three things: the loss of ground rent over the remaining term, the delay in getting the property back at the end of the lease, and where applicable, 50% of the marriage value if your lease is below 80 years.
Step 3 - Instruct a Specialist Leasehold Solicitor
At the same time, appoint a solicitor who specialises in leasehold enfranchisement. Errors in the legal paperwork can invalidate your claim entirely, meaning you would have to start again.
Solicitor Fees vary depending on complexity and provider. You will also need to pay your freeholder's solicitor fees. Under the 1993 Act as it currently stands, you are required to pay your freeholder's reasonable legal and valuation costs.
Step 4 - Serve the Section 42 Notice
The formal process begins when your solicitor serves a Section 42 Notice on your freeholder. Under Section 42(3) of the 1993 Act, the notice must include your full name and address, details of the lease including its start date and original term, the premium you are proposing to pay, the proposed terms of the new lease, and the date by which the freeholder must respond, which must be at least two months from the date of the notice.
Serving the Section 42 Notice sets the valuation date. Years remaining and market value are assessed at that date, even if negotiations take time. If your lease is close to 80 years, this date determines whether marriage value is payable, which is why it is so important not to delay.
Step 5 - The Freeholder Serves a Counter Notice
The freeholder has until the date stated in your notice to respond with a counter notice. This date must be at least two months from the date you served the notice. If the freeholder does not respond by the stated date, you can apply to the court for a vesting order. In most cases, the freeholder will admit your right to extend but propose a higher premium.
Step 6 - Negotiation on the Premium
Once the counter notice is received, your surveyor and the freeholder's surveyor negotiate the premium. This can take several months. If no agreement can be reached, either party can apply to the First-tier Tribunal (Property Chamber) in England, or Residential Property Tribunal Wales, for a binding decision. Tribunal proceedings add cost and time but are a commonly used route when both sides are far apart on price.
Step 6 - Agree the Terms of the New Lease
Once the premium is settled, your solicitor and the freeholder's solicitor will agree on the detailed terms of the new lease. The main terms are fixed by law: for flats, the new lease will add 90 years to your existing term, and ground rent will be reduced to zero. For houses, under the 1967 Act, the extension will add 50 years to the existing lease term. Other terms, such as service charge provisions, may be subject to negotiation.
Step 6 - Exchange and Completion
Once everything is agreed, your solicitor will exchange contracts and complete the new lease. You pay the agreed premium, receive your new lease, and your solicitor registers it at HM Land Registry. The process typically takes several months, but timelines vary depending on negotiations and complexity. Your solicitor will manage all deadlines on your behalf to ensure the process stays on track.
Understanding Lease Extension Costs in 2026
The main cost is the premium, a lump sum paid to the freeholder that varies based on your property's value, ground rent, lease length, and local market conditions. If your lease is below 80 years, marriage value is added on top, which can add tens of thousands of pounds to your bill. Beyond the premium, you will also need to budget for your own solicitor and surveyor fees, your freeholder's reasonable legal and valuation costs, Land Registry fees, and VAT.
Freeholder’s reasonable legal and valuation costs, Land Registry fees, and VAT will also be part of the lease extension costs. While most lease extensions do not attract Stamp Duty Land Tax (SDLT), you must file a return with HMRC if the premium is £40,000 or more. Additionally, SDLT may also be payable on the Net Present Value (NPV) of the rent in some cases, depending on the terms of the lease extension. Your solicitor will advise you on your specific situation. For a full breakdown of all costs involved, see our dedicated lease extension costs guide.
Informal Versus Statutory Lease Extension: Which Route to Choose?
With an informal extension, the freeholder can set almost any terms they like, including retaining your existing ground rent, granting a shorter term than the statutory minimum, and introducing unfavourable new lease terms. None of the statutory protections apply.
With a statutory extension, your ground rent is reduced to zero, you receive your existing term plus 90 years, and you have the right to go to tribunal if negotiations break down. In almost all cases, the statutory route is the better choice.
Pre-Extension Checklist: Are You Ready to Start?
Obtain a copy of your lease from HM Land Registry and confirm the remaining term. Check that you are registered as the legal owner at the Land Registry (since 31 January 2025, you no longer need two years of ownership before serving notice). Confirm that your property is a qualifying flat (or house) under the 1993 Act. For qualifying houses, the property must be a leasehold house in England or Wales, with an original lease term of more than 21 years. It doesn’t matter how much time remains on the lease, but shared ownership properties qualify only if the leaseholder has staircase to 100% ownership.
Exclusions apply to properties in cathedral precincts or where the freehold is held by the National Trust as part of its inalienable estate. Identify any mortgage lender and inform them, as they may have requirements that could affect the lease extension process.
Instruct a specialist leasehold surveyor (RICS-registered, ALEP member where possible) to provide a valuation and proposed premium. Instruct a specialist leasehold solicitor (Law Society or ALEP-listed). Confirm you have sufficient funds to pay the premium, professional fees, and any SDLT. Consider the timing carefully relative to the 80-year threshold.
FAQs:
In most cases, no SDLT is payable. However, if the premium exceeds £40,000, you must submit an SDLT return to HMRC. Tax is only due if the premium exceeds the residential SDLT threshold of £40,000.
SDLT on a lease extension is mainly calculated on the premium paid. It can also apply to the rent element (Net Present Value) for leasehold transactions, but in statutory lease extensions the ground rent is reduced to a peppercorn (zero), so SDLT is usually based only on the premium.
Usually, yes. HMRC requires an SDLT return for most lease extensions, even if no tax is payable. However, an exception may apply if the premium is below £40,000 and the rent (if any) has a Net Present Value (NPV) of below £1,000 per year. If either the premium or the NPV of the rent exceeds these thresholds, an SDLT return must be filed. Where a return is required, it must be submitted within 14 days of completion.
No, lease extension costs are generally treated as capital expenditure and are not deductible from rental income. However, these costs can be added to the property's base cost when calculating Capital Gains Tax (CGT) upon the eventual sale of the property.
Yes. Costs may be added to base cost where they qualify as capital enhancement expenditure, which reduces the taxable gain when you sell the property.
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