Lease Extensions Explained: Eligibility, Cost and the Statutory Process

In short: A statutory lease extension lets the owner of a long-leasehold flat in England and Wales add 90 years to the existing lease at a peppercorn ground rent under the Leasehold Reform, Housing and Urban Development Act 1993. You pay the freeholder a premium, which rises sharply once the lease drops below 80 years, plus the freeholder's reasonable costs.

Last reviewed: 11 October 2026 by Patrick Oliver BSc (Hons) MRICS, RICS Registered Valuer.

Lease extension valuations are a large part of my practice, and the same questions come up every week: am I eligible, how much will it cost, should I wait for the new law, and what happens if the freeholder disagrees? This guide answers each in turn, then points you to my more detailed guides on Section 42 notices and how the premium is calculated.

What is a lease extension?

A lease extension is the grant of a new, longer lease of your flat in place of the existing one. Under the 1993 Act the new lease runs for the unexpired term of your current lease plus 90 years, the ground rent falls to a peppercorn (nil), and the other terms stay largely the same. A flat with 70 years left therefore ends up with 160 years and no ground rent.

Am I eligible to extend my lease?

You are eligible for a statutory lease extension if you are a qualifying tenant of a flat, which broadly means you own a long lease, originally granted for more than 21 years. Since 31 January 2025 you no longer need to have owned the flat for two years before making a claim, so a buyer can serve notice as soon as the purchase completes.

Houses are different. Leasehold houses fall under the Leasehold Reform Act 1967, which allows a 50-year extension at a modern ground rent or, usually the better option, the purchase of the freehold.

How much does a lease extension cost?

The cost of a lease extension is the premium payable to the freeholder plus professional fees: your own valuer and solicitor, and the freeholder's reasonable valuation and legal costs, which you must also pay. Under Schedule 13 of the 1993 Act the premium is made up of:

• Loss of ground rent the freeholder will no longer receive, capitalised.
• Loss of the reversion: the present value of getting the flat back when the lease ends, discounted using a deferment rate (generally 5% for flats, following the Sportelli decisions).
• Marriage value: half of the increase in value created by the longer lease, payable only where the lease has 80 years or less unexpired.
• Compensation for any other loss to the freeholder, which is rare.

The 80-year line matters. Once the unexpired term falls to 80 years, marriage value becomes payable and the premium can jump significantly. Many mortgage lenders also become cautious as leases approach that length. I explain each element with worked figures in the Schedule 13 premium guide.

How does the statutory lease extension process work?

The statutory process runs through a fixed sequence of notices and deadlines that protect your right to the extension.

1. Valuation. An RICS valuer assesses the premium so you know the likely cost and the figure to propose.
2. Section 42 notice. Your solicitor serves a tenant's notice on the freeholder proposing a premium. Serving it fixes the valuation date. See Section 42 notices explained.
3. Counter-notice. The freeholder must reply by the date in your notice, at least two months later, admitting or disputing your claim and making a counter-proposal.
4. Negotiation. The two valuers negotiate the premium. Most claims settle at this stage.
5. Tribunal if needed. If terms are not agreed, either side can apply to the First-tier Tribunal (Property Chamber) within the statutory window, otherwise the claim is treated as withdrawn.
6. Completion. The new lease is granted and registered, and the premium is paid.

Statutory or informal lease extension: which is better?

A statutory extension guarantees 90 extra years and a peppercorn ground rent at a premium fixed by law; an informal extension is a private deal with the freeholder that can be quicker but carries no such protections.

	Statutory (1993 Act)	Informal (negotiated)
Term added	90 years	Whatever is agreed
Ground rent	Peppercorn	May continue or increase
Premium	Set by Schedule 13; Tribunal if disputed	Negotiated; no statutory basis
Other lease terms	Largely unchanged	Freeholder may seek new terms
Speed	Fixed timetable	Can be faster

Informal offers can be good value, but check the ground rent and any new terms carefully. Always have the offer valued before you accept it.

Should I wait for the Leasehold and Freehold Reform Act 2024?

As of October 2026, the main valuation changes in the Leasehold and Freehold Reform Act 2024 are not yet in force. The abolition of marriage value, 990-year extensions and new prescribed valuation rates still need regulations, and no commencement date has been announced. The government consulted on the rates until 23 September 2026. What is in force is the removal of the two-year ownership rule.

Waiting is a judgement call. If your lease is well above 80 years, there may be little cost in waiting. If it is near or below 80 years, each year adds to the premium and can affect your ability to sell or remortgage, so I generally advise getting a valuation now and taking legal advice on timing.

Lease extensions: frequently asked questions

How long does a lease extension take?

A statutory lease extension usually takes several months from the Section 42 notice to completion where terms are agreed, and longer if the case goes to the Tribunal. Informal extensions can be quicker if the freeholder is cooperative.

Do I have to pay the freeholder's costs?

Yes. Under the current law you pay the freeholder's reasonable valuation and legal costs of a statutory lease extension, in addition to your own. Costs of Tribunal proceedings are generally borne by each side.

Can I sell my flat during a lease extension?

Yes. The benefit of a Section 42 notice can be assigned to a buyer with the flat, which is common where a seller starts the claim and the buyer completes it.

What happens if the freeholder cannot be found?

If the freeholder cannot be found, you can apply to the County Court for a vesting order, and the Tribunal will determine the premium, which is paid into court.

Is a lease extension worth it if my lease is over 80 years?

A lease extension above 80 years is usually cheaper because no marriage value is payable, and it protects the flat's value and mortgageability. I set out the pros and cons in the pros and cons of a lease extension.

For a premium valuation, see our lease extension valuation service or contact us. If you and your neighbours want to buy the freehold together, read collective enfranchisement step by step. You can check our RICS regulation and credentials.

Patrick Oliver BSc (Hons) MRICS, Chartered Surveyor and RICS Registered Valuer, Aston James Associates.

This article is general information, not legal advice. Statutory deadlines are strict; take advice from a specialist leasehold solicitor before serving or responding to any notice.