Leasehold services: How to extend your lease without the hassle

Leasehold services: How to extend your lease without the hassle

Introduction

If you own a leasehold property, extending your lease before it becomes too short is crucial to maintaining its value and avoiding expensive renewal costs. The lease extension process can seem daunting, but with the right approach and legal guidance, you can navigate it smoothly.

This guide will explain everything you need to know about extending a lease within the Leasehold Reform, Housing and Urban Development Act 1993 –  including how leasehold services can simplify the process, your leasehold property rights, and key differences between leasehold vs freehold ownership.

What is a leasehold property?

A leasehold property is one where you own the property itself but not the land it sits on. Instead, you lease the land from the freeholder (landowner) for a set number of years. Once the lease expires, ownership of the property reverts to the freeholder unless the lease is extended.

Key facts about leasehold property rights:

• If your lease falls below 80 years, extending it becomes more expensive due to additional fees, such as marriage value.
• Properties with leases under 80 years become harder to sell or remortgage.

Why extend your lease?

Extending your lease has several benefits, including:

• Protecting property value – Shorter leases reduce a property’s market value and appeal.
• Easier sale or remortgage – Mortgage lenders prefer properties with longer leases.
• Avoiding high costs later – The shorter your lease, the more expensive it becomes to extend.

Leasehold vs freehold: What’s the difference?

Understanding the difference between leasehold vs freehold is essential when considering a lease extension.

• Leasehold – You own the property but not the land. You must pay ground rent and service charges and renew the lease before it expires.
• Freehold – You own both the property and the land indefinitely, with no lease to extend or ground rent to pay.

The lease extension process explained

The legal process for lease extension follows these key steps:

1. Obtain a lease valuation – A specialist surveyor assesses how much the lease extension will cost.
2. Serve a Section 42 Notice – A formal notice to the freeholder stating your intention to extend the lease.
3. Negotiate terms – The freeholder has two months to respond and may propose a counteroffer.
4. Formal agreement – Once terms are agreed, legal documents are drawn up and signed.
5. Register the new lease – The updated lease must be registered with HM Land Registry.

How much does a lease extension cost?

The cost of extending a lease varies based on factors such as:

• The current lease length (under 80 years means higher costs).
• The property’s market value.
• Ground rent and future rental income for the freeholder.
• Surveyor and solicitor fees.

How to avoid common lease extension pitfalls

• Not acting early – Waiting too long leads to higher costs and fewer options.
• Skipping professional advice – Using an experienced leasehold solicitor prevents legal errors.
• Ignoring mortgage lender requirements – If you plan to remortgage, lenders may have specific lease length requirements.
• Accepting an unfair freeholder offer – Always negotiate and seek legal advice before agreeing to terms.

Case study: How leasehold services helped a homeowner

Emma owned a leasehold flat with only 72 years left on the lease. She struggled to sell because mortgage lenders were hesitant to approve buyers.

With professional leasehold services, she:

• Received an accurate lease valuation.
• Served a Section 42 Notice to the freeholder.
• Negotiated a 90-year extension with a ground rent of a peppercorn.
• Successfully sold her flat at a higher price.

Future changes to leasehold law

The UK government is planning reforms to make extending a lease easier and cheaper for leaseholders. Proposed changes include:

• Removing marriage value to lower costs.
• Standardising lease extension terms to 990 years.

Final thoughts

Extending your lease is essential for maintaining your property’s value and securing your homeownership rights. The lease extension process may seem complex, but with expert leasehold services, it can be completed smoothly and efficiently.

Having expert support can also help you decide the best way of extending your lease, whether within the Leasehold Reform, Housing and Urban Development Act 1993 or approaching the freeholder outside of the Act.

For professional legal assistance with extending a lease, visit our Residential Property Solicitors page.

For official government guidance on lease extensions, check out Leasehold Advisory Service.

Specialist leasehold support

Fosters Solicitors are here to provide specialist support and advice for all your lease extension enquiries.

Our lease extension experts are vastly experienced in helping our clients through the entire process, guiding them through the options available, the approval and drafting of their lease extension, and helping them ultimately secure the long-term value of their property.

Contact us for more information.

 

This article was produced on the 20th March 2025 for information purposes only and should not be construed or relied upon as specific legal advice.