If you own a leasehold flat, the unexpired term of your lease is a diminishing asset. Every year it shortens, and as it shortens the cost of extending it rises. Most leaseholders come to the question at one of three moments: when a sale falls through, when a mortgage lender raises a query, or when the lease approaches 80 years.
This guide sets out how a statutory lease extension works, what drives the premium, and how to choose the surveyor and solicitor who will act for you.
Why 80 Years Matters
Below 80 years of unexpired term, marriage value becomes payable. Marriage value is the increase in the combined value of the freehold and leasehold interests that results from granting the extended lease, and where it applies the leaseholder pays half of it to the freeholder.
The practical consequence is that the premium does not rise smoothly as the lease shortens. It rises, then rises more steeply once the 80-year threshold is crossed. A lease at 81 years and a lease at 79 years are not two years apart in cost.
Section 8 of the Leasehold and Freehold Reform Act 2024 provides for the removal of marriage value from the premium, but that provision has not been commenced. Marriage value therefore remains payable on extensions of leases below 80 years.
Do You Qualify?
The statutory route under the Leasehold Reform, Housing and Urban Development Act 1993 gives qualifying leaseholders the right to a new lease of 90 years in addition to the existing unexpired term, at a peppercorn ground rent. To qualify you must hold a long lease — one originally granted for more than 21 years.
The two-year ownership requirement was abolished on 31 January 2025, so a leaseholder no longer needs to have owned the flat for two years before making a claim.
If you prefer not to use the statutory route, a voluntary extension negotiated directly with the freeholder is sometimes possible. It is worth understanding the trade-off: a voluntary extension can be quicker and cheaper in fees, but the terms are whatever the parties agree. There is no statutory 90 years, no guaranteed peppercorn rent, and no Tribunal to determine the premium if you cannot agree. Leaseholders sometimes accept a voluntary extension that leaves a rising ground rent in place, which can create difficulties on a later sale.
The Process, Step by Step
1. Valuation
A surveyor assesses the premium payable. This establishes the figure that will go into the notice and the position you will be negotiating from. The valuation is prepared on the statutory basis, which requires the flat to be valued in its unimproved condition, disregarding improvements made by the leaseholder. For that reason a valuation is frequently prepared on a desktop basis, working from floor plans or lease plans together with local comparable evidence.
The main variables are the value of the flat, the unexpired term, the ground rent and its review provisions, and the capitalisation and deferment rates applied.
2. Serving the Section 42 Notice
The claim is started by serving a notice under Section 42 of the 1993 Act on the competent landlord. The notice must specify a premium, and that figure needs to be realistic and supportable. A notice pitched implausibly low invites a counter-notice at the other extreme and can lengthen the process rather than shorten it. A defective notice can invalidate the claim altogether. The date of service fixes the valuation date, which is one reason not to delay when a lease is approaching 80 years.
3. The Counter-Notice
The freeholder has a period in which to respond, admitting or disputing the claim and proposing their own premium. In practice most counter-notices admit the claim and dispute the figure.
4. Negotiation
The two surveyors narrow the gap by reference to evidence — comparable transactions, relativity, and the rates applied — rather than by splitting the difference. The great majority of cases settle at this stage. If agreement cannot be reached, either party may apply to the First-tier Tribunal (Property Chamber) to determine the premium. Relatively few cases go that far, but the possibility shapes the negotiation: both sides are arguing positions they would have to defend.
5. Completion
The new lease is granted and the premium is paid, together with the freeholder’s reasonable costs, which the leaseholder is liable for under the Act. The extended lease adds 90 years to the existing unexpired term at a peppercorn ground rent.
Choosing Your Advisers
Solicitor or conveyancer?
Leasehold enfranchisement is a specialist area. A conveyancer who handles residential sales competently may not deal with Section 42 claims regularly, and the procedural requirements are unforgiving — deadlines are strict and errors can be costly. Ask how much enfranchisement work the firm actually does, and who will conduct your matter.
Valuer credentials
The valuation should be prepared by an RICS-qualified surveyor, ideally an RICS Registered Valuer, with genuine familiarity with your local market. Relativity and comparable evidence vary across London and across the country, and a surveyor who regularly acts in your area will have a clearer view of the evidence than one instructed there for the first time.
Working together
The valuation and the legal work are not independent. A well-evidenced premium is of limited use if the notice is defective, and a correctly served notice does not help if the figure cannot be supported. Where the surveyor and solicitor work closely together, questions arising mid-negotiation can be resolved directly.
Referral panels
Some organisations offering lease extension services act principally as referral agents: they take the enquiry, retain a fee, and pass the case to a firm on a panel. That model can work perfectly well, but it is worth understanding what you are buying, because it affects who is accountable for the advice and how much of what you pay reaches the people doing the work.
Costs
Leaseholders should expect several distinct costs: the premium paid to the freeholder for the new lease; your surveyor’s fees for the valuation and negotiation; your solicitor’s fees for the claim and the grant of the new lease; and the freeholder’s reasonable costs, which are payable by the leaseholder under the Act within statutory limits.
Fixed fees give certainty and are generally preferable to hourly rates for a process of this kind. When comparing quotations, check what is included: whether negotiation is covered or charged separately, and what happens if the matter proceeds to Tribunal.
Key Questions to Ask
- Is the valuer RICS-qualified and a Registered Valuer, and how often do they act in your area?
- Are the solicitors SRA-regulated, and does enfranchisement form a substantial part of their practice?
- Is the fee fixed, and what does it exclude?
- Who will conduct the negotiation, and what happens if the matter goes to Tribunal?
- How do the surveyor and solicitor communicate during the claim?
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When to Act
The costs of delay are cumulative and, once the term approaches 80 years, they accelerate. If your lease is anywhere near that threshold, obtaining a valuation is the sensible first step — it tells you what the extension would cost now, and what waiting is likely to cost you.
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