A short lease reduces your property’s value and can make it difficult to sell or remortgage. If your lease has fewer than 80 years remaining, acting now is financially important, the cost of extending increases significantly once you cross below the 80-year threshold. Nelsons’ lease extension solicitors in Leicester, Derby, and Nottingham advise on both informal negotiations with freeholders and statutory claims under the Leasehold Reform, Housing and Urban Development Act 1993.
Get conveyancing advice today on 0800 024 1976 or via our online enquiry form.
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Why Lease Length Matters for Your Property Value
Most mortgage lenders require a lease to have at least 70 to 85 years remaining on completion, though requirements vary by lender. Leases below 80 years are more expensive to extend because a premium called marriage value becomes payable to the freeholder. For every year a lease falls below 80, the extension premium typically increases. Extending early protects both your property’s value and its mortgageability.
Statutory vs Informal Lease Extension
There are two routes to extending a lease. The right approach depends on your circumstances, the freeholder’s willingness to negotiate, and the urgency of the extension.
Statutory Lease Extension
Under the Leasehold Reform, Housing and Urban Development Act 1993, qualifying leaseholders of flats have a legal right to extend their lease by 90 years on top of the existing term, with ground rent reduced to a peppercorn (zero). To qualify, you must have owned the leasehold property for at least 2 years. The statutory route provides important legal protections, including the right to have the premium determined by the First-tier Tribunal (Property Chamber) if you cannot agree a price with the freeholder.
Informal Lease Extension
Many freeholders will negotiate a lease extension directly, outside of the statutory process. An informal extension can be faster in some cases, but it does not carry the same legal protections. Any new ground rent arrangement must comply with the Leasehold Reform (Ground Rent) Act 2022, which requires ground rent on new leases to be zero.
How the Statutory Lease Extension Process Works
A statutory lease extension follows five main stages from valuation to registration at HM Land Registry.
- Valuation: Before serving notice, you should obtain a specialist leasehold valuation to establish the likely premium. We can recommend qualified surveyors.
- Section 42 Notice: We serve a formal notice on the freeholder setting out the proposed premium and terms of the new lease.
- Freeholder’s counter-notice: The freeholder has 2 months to respond. Negotiations then take place between the valuers on both sides.
- Agreement or tribunal: If a premium is agreed, we proceed to completion of the new lease. If not, either party can apply to the First-tier Tribunal (Property Chamber) to determine the premium.
- New lease completion and registration: We prepare and complete the new lease, which is registered at HM Land Registry.
Why Choose Nelsons as Your Conveyancing Solicitors?
Nelsons is one of the largest residential property teams in the East Midlands. We hold the Law Society Conveyancing Quality Scheme (CQS) accreditation, are proud members of the Conveyancing Association, and were named Conveyancing Firm of the Year – Midlands at the LEAP Modern Law Conveyancing Awards 2024. Here is what that means for you in practice.
- Law Society CQS accredited: the recognised quality standard for residential conveyancing
- Conveyancing Firm of the Year: Midlands, LEAP Modern Law Conveyancing Awards 2024
- Member of the Conveyancing Association: committed to industry best-practice standards
- A Named Conveyancer Throughout: You’re assigned a dedicated conveyancer for your transaction, so you always know who to call and aren’t passed between departments.
- Transparent pricing: Fixed fees for complete cost certainty from the outset
- Local Knowledge, Three Office Locations: With offices in Derby, Leicester and Nottingham, we understand the local property markets we work in and offer face-to-face appointments where you’d prefer them to a phone call.
- Innovative Processes: most of the process can now be undertaken electronically including the use of electronic signatures for the Contract and Transfer deed.
Speak to Our Conveyancing Solicitors
Ready to move forward, or want to discuss your situation before committing? Our residential property team in Derby, Leicester and Nottingham is here to help. Get lease extension advice advice today on 0800 024 1976 or via our online enquiry form. No-obligation quotes available.
Meet the team
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Chris HuntingfordPartner & Solicitor
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Joanne JonesPartner & Solicitor
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Trevor ScottPartner & Licensed Conveyancer
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Russell HurstLegal Director & Licensed Conveyancer
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Jane BurtonLegal Director & New Build Team Manager
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Lease Extension Solicitors FAQS
Below, we have answered some frequently asked questions concerning lease extension solicitors
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How much does it cost to extend a lease?
The cost depends on the current lease length, the property’s value, the ground rent, and the years remaining. Extensions where the lease is above 80 years are generally less expensive. Below 80 years, marriage value applies and costs increase substantially. You will need both a specialist leasehold valuation and legal advice to understand the likely total cost.
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[H3] Can I extend a lease on a house?
Yes. Leaseholders of houses have separate rights under the Leasehold Reform Act 1967, which includes the right to extend the lease or to enfranchise (buy the freehold outright). The rules differ from those applying to flats under the 1993 Act.
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Does extending a lease increase the value of my property?
Yes. A lease extension typically increases a property’s market value, particularly where the lease was short. Properties with long leases are more attractive to buyers and lenders than those with leases below 80 years.
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What is marriage value?
Marriage value is an additional premium payable to the freeholder when a lease is extended under the statutory route and the unexpired lease term is below 80 years. It represents a share of the increase in the property’s value that results from the extension itself. Once the lease falls below 80 years, marriage value can add substantially to the cost of extending.
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Can I extend my lease before I have owned the property for 2 years?
The statutory right to extend requires 2 years’ ownership. However, it is possible to negotiate an informal extension with the freeholder at any time. If you are purchasing a short-lease property, the seller may be able to assign their statutory right to you as part of the conveyancing process.
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