The Leasehold and Freehold Reform Act 2024 which received royal assent at the end of May 2024, introduced various changes for owners of leasehold properties in England and Wales, including an overhaul of the lease extension process.
However, with full implementation of the Act likely to take years rather than months, industry insiders have urged homeowners not to “put their lives on hold” waiting for the government to reform the ‘feudal’ leasehold system.
If a lease has less than 80 years remaining, its owner should act immediately to extend it, in order to avoid a dramatic drop in the property’s value or, worse still, having to pay a market rent for the property or hand the keys back to the landlord.
In this blog, our experienced Lease Extension solicitors consider what owners of leasehold properties should do to extend a lease.
Do you have to wait for two years to extend a lease?
One of the elements of the Leasehold and Freehold Reform Act that has come into effect is the abolition of the need for a leaseholder to have owned a property for at least two years before they have the right to extend their lease.
Since February 2025, leaseholders qualify for a statutory lease extension or can initiate an enfranchisement claim to acquire the freehold immediately upon purchasing a leasehold property (subject to the Land Registry application being processed).
How do you extend a lease?
There are two ways of extending a lease. The first is the ‘informal route’, which involves the leaseholder approaching the landlord to see whether the landlord is willing to grant a lease extension.
The parties then negotiate to agree the new lease term and the price to be paid for the lease extension. There are no rules governing this route.
If both parties cannot agree on the terms of the lease extension, then the formal statutory route must be followed, the details of which are set out in the Leasehold Reform, Housing and Urban Development Act 1993.
This Act provides that all residential flat owners are entitled to add 90 years to the remaining term of their lease at a peppercorn (zero) ground rent.
The statutory route to lease extensions involves the following main steps:
1. Instruct a specialist solicitor.
Appointing an experienced legal professional specialising in lease extensions is the crucial first step in ensuring a lease extension runs smoothly.
A residential property solicitor will guide you through the process and ensure that all the correct legal procedures are followed.
At Beverley Morris & Co. Solicitors, we help clients in Blackheath and across the wider South East with lease extensions, providing tailored and cost-effective legal advice.
We will always ensure that you are fully aware of any costs involved, providing clear information on our fees throughout the process.
A solicitor experienced in lease extensions will check the relevant eligibility criteria, help locate the freeholder and advise on what documentation you may need to compile.
For more information about what is involved in lease extensions or to speak to one of our specialist lease extension solicitors, please call 020 8852 4433 or email enquiries@beverleymorris.co.uk.
2. Instruct a valuation surveyor.
An independent surveyor with experience of lease extensions and knowledge of the local property market will assess the property and evaluate how much the leaseholder should pay to the freeholder (known as the ‘premium’).
3. Make an offer.
Your solicitor will then formally initiate the process by serving a “section 42 notice” on the freeholder, advising them of your intention to extend the lease, and setting out the proposed terms.
Some landlords might require a deposit, which must be paid within 14 days.
4. Negotiations.
Negotiations over the terms of the new lease will then take place with the landlord until you reach an agreement.
5. Completion.
Once the terms of the lease extension have been agreed, you will be required to pay the premium that has been agreed, your own legal costs and surveyor’s fees plus the freeholder’s legal fees and valuation fee.
6. Tribunal
If terms cannot be agreed with the landlord, then the premium and any other terms will be determined by a Tribunal.
How long do lease extensions take?
Lease extensions typically take between three and 12 months depending on whether the informal or formal route is followed.
If the formal route is followed, The Leasehold Reform, Housing and Urban Development Act 1993 sets out specific timeframes during which particular tasks must be completed.
Instructing a competent and efficient solicitor can help the whole process run smoothly. For more information about lease extension timeframes, click here.
How much does it cost to extend a lease?
The cost of a lease extension depends on various factors, including the market value of the property, the number of years left on the lease, the annual ground rent, and the value of improvements made to the property by the leaseholder.
Find out how much your lease extension might cost by clicking here.
Lease Extension Solicitors Blackheath
If you are hoping to increase your lease term by way of a lease extension, our solicitors at Beverley Morris & Co. Solicitors can help.
Our residential property lawyers are very experienced in lease extensions and will guide you through the process involved to make it as smooth and stress free as possible.
Whether you should look to extend your lease now or wait for the new legislation to come into force is not straightforward, and specialist legal advice is vital.
If you are considering extending a lease on a residential property, our specialist residential lease extension solicitors at Beverley Morris & Co. can explain precisely what is involved. We will advise the best course of action for your situation and help and support you at every stage.
To speak to our Lease Extension solicitors today, call us on 020 8852 4433 or email enquiries@beverleymorris.co.uk.