If you own a leasehold property, the length of the lease is one of the most important factors affecting value and marketability. As the lease term reduces, the property can become harder to sell or mortgage, and extending the lease may become more expensive.

Many leaseholders are likely to need to consider a lease extension during ownership. Understanding when and how to extend your lease can help protect the long-term value of your property.

At Wilson Law, we advise leaseholders on their rights and options when extending a lease. Our aim is to make the process as clear, practical and straightforward as possible.

What Is a Lease Extension?

A lease extension increases the length of time you have the legal right to occupy your flat.

Under current legislation, most qualifying leaseholders have the right to extend their lease by 90 years on top of the existing term. As part of the statutory process, the ground rent is usually reduced to a nominal amount.

Extending the lease helps ensure the property remains attractive to buyers and mortgage lenders and protects the long-term value of the flat.

Why Lease Term Matters

The number of years remaining on a lease has a direct impact on the property’s value and mortgage availability.

Most mortgage lenders prefer leases with at least 80 to 90 years remaining at the time of purchase. As the lease term reduces, the property may become more difficult to sell.

A key threshold occurs when the lease drops below 80 years. At this point, the cost of extending the lease can increase significantly because the freeholder becomes entitled to a share of the increase in property value created by the extension. This is known as marriage value.

For this reason, many leaseholders choose to begin the extension process before the lease reaches the 80 year point.

Who Can Extend a Lease?

In most cases, you will qualify for a statutory lease extension if:

• You own a long lease originally granted for more than 21 years
• You have owned the property for at least two years
• The building qualifies under the relevant legislation

If you have recently purchased a flat with a shorter lease, it may sometimes be possible for the seller to start the lease extension process and transfer the benefit to you on completion.

The Lease Extension Process

The lease extension process generally involves several stages.

Valuation

Before serving a formal notice, it is common to obtain a valuation from a specialist surveyor to estimate the premium payable to the freeholder.

Serving the Notice

Your solicitor prepares and serves a formal notice on the freeholder stating your intention to extend the lease and proposing a premium.

Freeholder’s Response

The freeholder has a statutory period in which to respond and may accept the proposal or negotiate the price and terms.

Negotiation

Surveyors for both sides may negotiate the premium payable for the extension.

Completion of the New Lease

Once the terms are agreed, the new extended lease is granted and registered at HM Land Registry.

Timescales can vary, but the statutory process often takes several months to complete.

Informal Lease Extensions

In some situations, leaseholders may agree an informal lease extension directly with the freeholder outside the statutory process.

While this can sometimes be quicker, the terms must be reviewed carefully. Informal agreements may include increased ground rent or less favourable conditions.

For this reason, it is important to obtain legal advice before agreeing to any informal extension offered by a freeholder.

Costs Involved

The cost to extend a lease can vary, depending on several factors, including:

• The premium payable to the freeholder
• Your legal costs
• Valuation fees
• The freeholder’s reasonable legal and valuation costs
• Land Registry fees

The premium payable to the freeholder will depend on a number of considerations, including the current lease length, ground rent and the value of the property.

Why Owners Extend Leases Early

Many leaseholders choose to extend their lease well before it becomes too short. Doing so can:

• Protect the property’s market value
• Make the flat easier to sell or remortgage
• Avoid the increased costs associated with leases under 80 years
• Provide long-term security of ownership

Taking advice early can help you plan the most cost-effective approach.

Leasehold Property in London and Surrey

Leasehold flats form a significant part of the housing market in London and Surrey, particularly within converted period properties and purpose-built apartment buildings.

Because many of these buildings were developed several decades ago, some leases may now be approaching the point where extension becomes necessary.

Understanding your rights and options can help ensure your property remains a valuable long-term asset.

How Wilson Law Can Help

At Wilson Law, we advise leaseholders on the legal aspects of lease extensions and guide clients through the process from start to finish.

Our team provides:

• Clear advice on your legal rights
• Preparation and service of statutory notices
• Negotiation with the freeholder’s solicitors
• Support throughout the legal process
• Transparent and practical guidance

We aim to ensure that you understand each step and that your interests are protected throughout the transaction.

Get in Touch

If you are considering extending the lease on your flat and would like clear legal advice, please contact Wilson Law with any queries.

We would be pleased to discuss your situation and help you take the next steps with confidence.