Until recently, leaseholders were required to own their flat for at least two years before they could start a statutory lease extension. However, as of 31 January 2025, that rule has changed — and for the better.
This guide explains the abolition of the two-year rule, what it means for current and new leaseholders, and how you can now start extending your lease immediately after purchase. Whether you’re a buyer, seller, or investor, this change could save you time, money, and considerable hassle.
What Was the Two-Year Ownership Rule?
Before 31 January 2025, the law stated that in order to qualify for a statutory lease extension under the Leasehold Reform, Housing and Urban Development Act 1993, you had to:
- Be the registered owner of the leasehold flat
- Have owned it for a minimum of two years
This rule often caused delays and frustration — particularly for buyers of short-lease flats who couldn’t take action immediately and had to:
- Wait two years to become eligible
- Or rely on the seller to serve a Section 42 notice before sale and assign it to them
What Has Changed?
Under the Leasehold and Freehold Reform Act 2024, effective 31 January 2025, the two-year ownership rule was abolished.
This means:
- You can start the statutory lease extension process immediately after buying your flat
- There’s no more waiting period or need to rely on sellers
- You gain faster control over your property’s value and mortgageability
Who Benefits Most from This Change?
🏡 New Buyers of Short-Lease Flats
Buyers can now act immediately to protect their investment. This is particularly important for flats with:
- Less than 90 years remaining
- Marriage value risks below 80 years
- Ground rent escalation clauses
🤝 Sellers of Short-Lease Flats
Sellers no longer need to:
- Serve and assign a Section 42 notice to the buyer
- Manage extra legal coordination during the sale
The sales process is simpler and quicker.
💼 Property Investors
Investors can now acquire and extend leases without delay, improving:
- Resale value
- Mortgageability of their portfolio
Real-World Scenario: Pre-2025 vs Post-2025
Before the Reform:
James purchased a flat with 75 years remaining. He had to wait two full years before starting a statutory lease extension. By the time he qualified, the lease had dropped to 73 years, and he had to pay marriage value, significantly increasing the cost.
After the Reform:
Now, if Emma buys a similar flat post-2025 with 81 years remaining, she can begin the extension process immediately and avoid marriage value altogether, saving thousands.
Can I Still Extend My Lease Voluntarily?
Yes — you can always negotiate an informal lease extension directly with your freeholder. However:
- The landlord is not obligated to respond or agree
- You could face less favourable terms (e.g., escalating ground rent)
- You don’t get statutory protections
Statutory lease extensions are still the recommended route for fairness, consistency, and legal safeguards.
What About Leaseholders Who Have Already Owned Their Flat for 2+ Years?
If you already meet the two-year threshold, you still qualify for a statutory lease extension — and can proceed as usual.
This change does not reduce or remove your rights — it simply expands access to others sooner.
Key Advantages of Extending Sooner
- Avoid marriage value — applicable once the lease drops below 80 years
- Maximise property value — longer leases attract higher market prices
- Secure better mortgage terms — lenders prefer leases with 85+ years remaining
By extending earlier, you reduce your premium and increase your property’s attractiveness to future buyers.
FAQs
Do I still need to live in the property to extend the lease?
No — you only need to own the leasehold. Occupation is not required so the flat can be vacant or used as a buy to let investment.
Can I assign the benefit of a lease extension notice if selling?
Yes, though it’s less necessary now. Assignments are still useful if timing is critical.
Does this apply to houses as well as flats?
The two-year rule was only relevant to leasehold flats under the 1993 Act. Lease extensions for houses follow a different legal route.
Best Practices After the Rule Change
- Extend immediately upon purchase, especially for leases under 90 years
- Commission a valuation early to understand your premium and timing
- Choose the statutory route to lock in a 90-year extension and eliminate ground rent
Common Mistakes to Avoid
- Assuming you still need to wait two years — as of 31 January 2025, you don’t
- Delaying action — even though you can now extend immediately, doing so early helps avoid rising premiums
- Accepting informal offers without advice — they often come with less favourable terms
Ready to Extend Your Lease Immediately?
With the two-year rule abolished, there’s no reason to delay. Whether you’re a new buyer or long-time leaseholder, acting early helps you avoid rising costs, increase your property value, and take full control of your investment. At Extension.Lease, we offer fast, expert lease extension valuations and guide you through every legal step.
