Extending your lease increases property value, avoids marriage value, and reduces the ground rent to zero. It also makes selling or remortgaging easier. Buyers prefer longer leases, so it improves marketability, market value and future security particularly if your lease has less than 100 years remaining. Service charges have significantly increased in recent years due to inflationary pressures, reducing your ground rent to a peppercorn (NIL) will make your property more appealing with reduced liabilities.
If you own a leasehold flat, one of the most important financial decisions you can make is to extend your lease. Whether your term is approaching the critical 80-year threshold or you simply want to enhance your property’s value and marketability, lease extension offers a host of benefits.
This guide explores the major advantages of extending your lease, both for your immediate peace of mind and long-term investment security.
What Is Lease Extension?
A lease extension adds years to your existing lease term, effectively resetting the clock on your leasehold ownership. Under the statutory process (Leasehold Reform, Housing and Urban Development Act 1993), leaseholders of flats are entitled to:
- An additional 90 years added to the existing term
- Ground rent reduced to a peppercorn (effectively zero)
These terms apply automatically if you follow the statutory route, giving you robust legal protection.
Key Advantages of Extending Your Lease
1. Protects and Increases Property Value
Properties with long leases are more valuable. As your lease shortens, your flat loses value — often significantly once below 100 years.
- A lease with over 100 years is more attractive to buyers
- Extended leases achieve higher valuations
- The market value is preserved and often enhanced
2. Avoids the Marriage Value Trap
Once your lease drops below 80 years, you are legally required to pay marriage value as part of the premium. This can increase the lease extension cost by thousands of pounds.
Extending early avoids this entirely.
3. Improves Mortgageability
Mortgage lenders often decline applications for properties with short leases. Most require a term of at least 80–85 years.
Extending your lease ensures:
- A wider choice of lenders
- Competitive mortgage rates
- Easier remortgaging and refinancing
4. Facilitates a Smooth Sale
Buyers are cautious of short leases, and many solicitors and surveyors advise against purchasing them without an extension.
Extending your lease:
- Removes red flags for buyers
- Increases buyer confidence
- Ensures a quicker, smoother transaction
5. Reduces Ground Rent to Zero
A statutory lease extension reduces your ground rent to a peppercorn, or zero.
This has several benefits:
- No escalating or doubling ground rent
- Avoids Assured Shorthold Tenancy (AST) risks for high ground rent
- Saves hundreds of pounds annually
6. Avoids Increasing Extension Costs
Lease extension premiums rise as the term shortens. Waiting just a few years can add thousands to your bill — particularly when approaching or dropping below 80 years.
Extending early means:
- Lower premium
- Avoidance of costly future valuations and negotiations
7. Legal Certainty and Control
The statutory lease extension route offers:
- Fixed procedures and timeframes
- A right to tribunal determination if needed
- Protection against freeholder delays or unfair terms
Example: Lease Extension Impact
Flat A:
- 82 years remaining
- Market value: £300,000
Flat B (identical, but with 172 years after extension):
- Market value: £325,000–£340,000
- More mortgage options
- Lower buyer friction
By extending the lease early, the owner of Flat B preserved value and avoided marriage value costs.
FAQs
When should I extend my lease?
As soon as your lease nears 90 to 100 years — and definitely before it drops below 80 years.
What if I’m planning to sell soon?
Extend before you market — or serve the Section 42 Notice and assign it to the buyer.
Will the premium increase over time?
Yes — leasehold valuations are based on declining term and market conditions. Extending early is always cheaper.
Can I extend if I haven’t owned the flat for 2 years?
Yes — since January 2025, the two-year ownership requirement has been abolished.
Summary: Why Extend Your Lease?
| Benefit | Description |
| Property value | Preserved and enhanced |
| Mortgage eligibility | Wider access to lending |
| Cost control | Avoid rising premiums and marriage value |
| Legal protection | Clear process under 1993 Act |
| Zero ground rent | Statutory right to reduce to peppercorn |
Ready to Extend Your Lease?
At Extension.Lease, we provide:
- Clear premium estimates
- Expert guidance on timing and cost
Negotiation with freeholders and full legal coordination
