Lease Extension: Cost and Process Explained

Extending a lease typically costs between £5,000 and £30,000 or more, plus £2,000 to £5,000 in professional fees, depending on your property's value, how many years remain and the ground rent you currently pay. The premium, the sum paid to your freeholder, is usually the largest single cost by far. Everything else sits on top: solicitors, surveyors, Land Registry fees and sometimes Stamp Duty. If your lease is running short, it helps to understand what happens when a lease expires before deciding how quickly to act, since a lease that reaches zero returns the flat to the freeholder with no compensation to you.

What catches most leaseholders off guard is that you don't just cover your own costs. Under the statutory route you're also liable for a share of the freeholder's fees. Here's every cost element you should budget for.

The premium (the main cost, paid to the freeholder)

This is the compensation you pay your freeholder for adding years back onto your lease and, where applicable, reducing the ground rent to a peppercorn, effectively zero. It's calculated using capitalised ground rent, the freeholder's reversion value and, on leases under 80 years, marriage value. The premium is almost always the largest cost in the transaction, frequently ten times higher than every professional fee added together.

Your solicitor fees (£800 to £1,500)

You need a solicitor experienced in leasehold enfranchisement to serve notices, review the freeholder's response and handle legal completion. Fees vary by firm and by whether the case settles quickly or ends up at tribunal. Compare conveyancing fees from specialist firms before instructing anyone, since general practice solicitors sometimes charge more for enfranchisement work that sits outside their usual caseload.

Your surveyor or valuation fees (£600 to £1,000)

A RICS-qualified surveyor calculates a fair premium on your behalf and negotiates directly with the freeholder's surveyor. This valuation underpins your Section 42 notice, so an inaccurate figure can delay the whole process or weaken your negotiating position significantly.

Freeholder's solicitor fees (you pay these too, £800 to £1,500)

Under the statutory route, you're required to cover the freeholder's reasonable legal costs as well as your own. This is one of the most commonly overlooked costs and a major reason final bills run higher than first-time leaseholders expect going in.

Freeholder's surveyor fees (you may pay these, £500 to £1,000)

If the freeholder instructs their own valuer to challenge your premium offer, you'll usually be liable for those fees too, provided they're reasonable and proportionate to the property's value and the complexity of the case.

Land Registry fee (£50 to £920)

Registering the extended lease at HM Land Registry carries a fee set on a sliding scale tied to the transaction value. Most flat extensions fall somewhere in the £135 to £330 band, though higher-value properties pay more.

Stamp Duty (if the premium exceeds the threshold)

Stamp Duty Land Tax applies if the premium you pay exceeds £250,000, which is rare for most flats but possible for high-value London properties combined with a very short remaining lease.

The premium is calculated using a formula set out in the Leasehold Reform, Housing and Urban Development Act 1993. Surveyors handle the maths, but understanding the three components helps you sanity-check any figure a freeholder proposes. Three elements combine to produce the final number: capitalised ground rent, reversion value and, for leases under 80 years, marriage value. Marriage value is the component that changes everything, and it's why the 80-year mark matters more than any other number in this guide.

• Capitalised ground rent: the value today of all the ground rent you would otherwise pay the freeholder over the remaining term, converted into a single lump sum.
• Reversion value: the value of the freeholder's right to take back the property when your lease eventually runs out, discounted to reflect how many years remain.
• Marriage value: only applies below 80 years remaining. It's the extra value unlocked by extending a short lease, split 50/50 between you and the freeholder.

The 80-year threshold is the single most important figure in this entire guide. Below it, marriage value applies and can add tens of thousands of pounds to your premium, because half of the uplift in your flat's value goes straight to the freeholder. Above 80 years, marriage value is zero, so premiums stay meaningfully lower, even for a lease sitting just a year or two above the line.

Take a £200,000 flat with 78 years remaining and £150 annual ground rent. A surveyor might value the capitalised ground rent at around £2,000, the reversion value at around £8,000, and marriage value, 50% of the roughly £12,000 uplift in flat value once extended, at around £6,000. Add those together and the premium lands close to £16,000, before any professional fees.

Cost rises sharply as a lease shortens, and the increase isn't gradual, it accelerates once you cross the 80-year marriage value threshold. The table below shows illustrative total costs, premium plus typical professional fees, for a £200,000 flat at six different lease lengths, all else being equal. These figures assume a modest ground rent and a straightforward negotiation; your actual cost depends on your specific ground rent, your freeholder's stance and whether the case needs to go to tribunal. If your lease has already dropped below 80 years, read our guide to buying a flat with a short lease for what a short lease means for mortgageability and resale.

Notice how the jump between 85 and 75 years dwarfs the jump between 90 and 85 years. That's marriage value doing its work: once you're below 80 years, roughly half of every pound your flat gains in value from the extension goes to the freeholder rather than staying with you.

These numbers are illustrative only. A qualified surveyor needs to value your specific flat, ground rent and location before you rely on any figure for budgeting or negotiation purposes.

You can extend a lease in two ways: the statutory route, sometimes called the formal route, or an informal negotiation directly with your freeholder. The statutory route costs more upfront because you're legally required to cover the freeholder's costs alongside your own, but it comes with guaranteed rights: a 90-year extension, soon to become 990 years, and ground rent reduced to zero. The informal route can work out cheaper in fees since there's no obligation to pay the freeholder's costs, but you lose your statutory protections and the freeholder sets the terms.

Which route makes sense depends on your relationship with the freeholder and how much certainty you need. A cooperative freeholder might offer generous informal terms quickly and cheaply. An unresponsive or commercially minded freeholder makes the statutory route worth its extra cost, because it forces a response within fixed timeframes and gives you the right to apply to the First-tier Tribunal if you can't agree a premium.

• Statutory route: higher combined legal and surveyor costs because you cover both sides, but guarantees a long extension, ground rent at zero and a tribunal backstop if talks stall.
• Informal route: potentially lower fees since you're not paying the freeholder's costs, but no guaranteed extension length, no ground rent guarantee and no tribunal right if the freeholder won't negotiate reasonably.

If your relationship with the freeholder has broken down entirely, or the premium keeps climbing every time your lease shortens, it may be worth exploring buying your freehold outright instead, either alone or with other leaseholders in the building.

The Leasehold and Freehold Reform Act 2024 makes three changes that directly affect what a lease extension costs, though implementation is being phased in and some provisions require secondary legislation before they take full effect. The headline change is the abolition of marriage value, which removes the single biggest cost driver for anyone with fewer than 80 years remaining. Standard extensions will also move from 90 years to 990 years, and ground rent will be reduced to zero on every extension, statutory or informal, once the relevant rules are in force.

For a leaseholder with, say, 70 years remaining on a £200,000 flat, removing marriage value alone could save several thousand pounds compared with the current rules, because you'd no longer hand over 50% of the value uplift to the freeholder. The catch is timing: the government hasn't confirmed exactly when every provision commences, and some elements are still working through Parliament and consultation. Anyone close to the 80-year line needs to weigh a known cost today against an uncertain saving later.

There's no single right answer, and much depends on how confident you are in the reform timetable and how long you plan to keep the property. The decision usually comes down to which band your remaining lease term falls into.

• Above 82 years remaining: you can probably afford to wait. Marriage value isn't in play yet and your lease won't cross the 80-year threshold for several years, so there's little cost to delaying.
• 80 to 82 years remaining: extend now if you can. Waiting risks crossing the 80-year line before reform takes effect, which would add marriage value to your premium under the current rules with no guarantee the new rules will apply in time.
• Below 80 years remaining: take legal advice before deciding. Waiting for reform might eventually remove marriage value from your premium, but every year you wait, your lease gets shorter, your flat becomes harder to mortgage or sell, and mortgage lenders may start declining applications.

If you're selling within the next few years rather than staying long-term, a short lease can also deter buyers and their mortgage lenders regardless of what reform eventually delivers, so don't let a potential future saving outweigh a real, present-day problem.

The statutory process follows a fixed legal sequence with defined response times at each stage, which is one of its biggest advantages over an informal negotiation. Here's what to expect from first eligibility check through to registering your new lease, along with a realistic timeframe for each step. For broader context on the wider leasehold conveyancing process, see our main guide.

Step 1: Check your eligibility

You generally need to have owned the flat for at least two years before you can serve a statutory notice. There's no minimum ownership period for the informal route, so if you've just bought, an informal approach might be your only immediate option.

Step 2: Get a RICS valuation

A RICS-qualified surveyor values the premium you should offer, based on your lease terms, ground rent and comparable evidence. Typical duration: one to two weeks.

Step 3: Instruct a specialist solicitor

Your solicitor drafts and serves the formal Section 42 notice, which starts the legal clock running on your freeholder's response. Typical duration: one to two weeks to prepare.

Step 4: Serve a Section 42 notice on the freeholder

This formal notice states your proposed premium and lease terms and is served on the freeholder, or their representative, to trigger the statutory process. Typical duration: served on a single day, with a response deadline set within it.

Step 5: Receive the freeholder's counter-notice

The freeholder has two months to respond, either accepting your terms, proposing a counter-premium, or disputing your right to extend altogether. Typical duration: up to two months.

Step 6: Negotiate the premium

Surveyors on both sides negotiate towards an agreed figure, informed by comparable transactions and tribunal precedent. Typical duration: one to three months, sometimes longer for contested cases.

Step 7: Apply to the First-tier Tribunal if needed

If you can't agree a premium, either party can apply to the First-tier Tribunal within six months of the counter-notice. The tribunal sets a binding figure. Typical duration: three to six months for a hearing date and decision.

Step 8: Complete and register at Land Registry

Once terms are agreed, solicitors complete the new lease and register it at HM Land Registry, formally extending your ownership. Typical duration: four to six weeks from agreement to registration.

A lease extension is a one-off lump sum rather than a monthly cost, so most leaseholders need to think about financing it much like a home improvement project or a large one-off bill. The right option depends on how much equity you have, whether you're already planning a remortgage, and how quickly you need the funds.

• Remortgage to release equity: often the cheapest option if you're due a remortgage anyway, since lease extension debt gets folded into your mortgage rate rather than sitting on a separate, higher-rate product.
• Personal loan or savings: suitable for smaller premiums, typically under £10,000, where the cost and hassle of remortgaging outweighs the convenience of a fixed personal loan term.
• Freeholder payment plans: rare, but some freeholders offer instalment terms, usually only available through the informal route rather than the statutory process.
• Bridging finance: fast but expensive, typically reserved as a last resort when a sale or remortgage is delayed and completion can't wait.

If you're weighing whether to extend now or eventually buy the freehold outright, comparing your financing options against the cost of converting from leasehold to freehold can help you plan further ahead.