Almost all leasehold properties in England and Wales are flats. When you purchase a flat, you purchase a lease for a fixed period and when the fixed period ends, the ownership of the flat goes back to the landlord. This means that the term of your lease will continue to decrease each day unless you, the leaseholder, extend the term.

The Leasehold Reform, Housing and Urban Development Act of 1993 (‘the Act’) gives leaseholders the right to extend the term of their lease by 90 years on top of the unexpired term at a peppercorn ground rent. In exercising their right, a leaseholder compensates the landlord by paying the landlord a purchase price (known as a ‘Premium’).

Who can extend the term of their lease?

If a leaseholder has a long lease, a lease which had an original term of over 21 years when it was originally granted, and has been the registered owner of the flat, at the Land Registry, for at least two years, then they will be known as a ‘Qualifying Tenant’ and can exercise their rights under the Act.

If the Qualifying Tenant is deceased, their personal representatives can serve a section 42 notice (‘Notice’) on the deceased Qualifying Tenant’s behalf, so long as they serve a Notice within two years of the grant of either the Grant of Probate or Letters of Administration.

What is the process for extending the term of a lease?

The procedure for extending the term of a lease is governed by the Act and sets out a strict timeline. The process is started by a Qualifying Tenant serving a Notice on the landlord. The Notice will set out a number of proposals for a new lease including the Premium the Qualifying Tenant proposes to pay to the landlord to extend their lease. The landlord will have around two months to serve a counter-notice in response to the Notice and then a further six months to commence negotiations and agree both the premium and the terms of the new lease with the Qualifying Tenant. Once terms have been agreed, the parties can prepare for completion.

When should a leaseholder extend the term of their lease?

It is advisable for a leaseholder to start the statutory lease extension process when their lease is approaching 85 years because when a lease drops below 80 years, the Premium a leaseholder pays will increase significantly as ‘marriage value’ applies. Marriage Value is the increase in the value of a property once its lease has been extended is an intricate calculation and must be valued by a competent lease extension surveyor.

If a leaseholder’s lease is approaching 80 years or less, then they may have difficulties in re-mortgaging or selling their property and may be advised to extend the term of their lease prior to doing so. A statutory lease extension may also be useful tool for leaseholders to extinguish any escalating ground rent.

What are the costs involved in a statutory lease extension?

As well as their own legal costs and the Premium, leaseholders will also be responsible for the landlord’s reasonable legal costs and the landlord’s lease extension survey report costs. Leaseholders also be expected to pay a 10% deposit to the landlord once a Notice has been served.

Should a leaseholder instruct a solicitor to act on their behalf?

It is strongly advised for leaseholders to instruct a solicitor who has experience in the relevant legal practices and procedures of leasehold enfranchisement as the process is complex and time sensitive and there can be costly consequences for a leaseholder if a Notice isn’t drafted correctly or if a statutory deadline is missed.

Proposed Leasehold Reforms

The King’s Speech on 7th November 2023 stated that there will be a bill to ‘reform the housing market and to make it cheaper and easier for leaseholders to purchase their freehold and to protect leaseholders form punitive service charges.’ For more information on these proposed changes please visit

If you would like more information on any of the above, please contact our solicitor in North London, Yasmin Benlafki, by visiting: