/ Money

Extending your lease – let’s all be civil, shall we?

Book with cardboard house

From the minute I put an offer in for my flat, I knew that the 73-year lease was too short. But what I didn’t realise was that purchasing a lease can easily be done informally. Here’s why I think it’s good to talk…

I’m in the process of buying what I can only describe as ‘an incredibly expensive piece of paper’.

My bank is happy to class it as a ‘home improvement’ and lend me a bit extra on my mortgage, but I won’t have anything particularly exciting to show for it. No shiny new bathroom, no smart double-glazing, not even a lick of paint in the lounge. All I’ll get is a piece of paper saying my flat’s lease will be 90 years longer.

When I bought my flat I knew the lease would be a problem – although 73 years sounds like a long time (73 years ago World War Two was just beginning) – in the world of leasehold properties it’s actually quite short.

If your lease drops below 80 years it suddenly costs much more to renew it, as you have to pay an extra chunk of money to your freeholder (called the ‘marriage value’). If your lease drops further, below 70 years, it’s difficult to get a mortgage on the property and therefore trickier for you, the owner, to sell the flat.

How to extend your lease

The good thing about leasehold flats is that there are laws in place that give you the right to buy your lease after you’ve lived in the property for two years. The bad news is that it can be an expensive process.

You have to have a solicitor serve a ‘Section 42’ notice on your freeholder, then you must pay for valuation of the lease and for the freeholder’s own valuation. Finally, when your solicitors have negotiated a price and the transaction’s gone through, you’re also liable for the costs of both parties’ solicitors. Ouch.

I was, however, surprised that many solicitors and advice websites presented this as the only option. It’s an expensive process, with a lot of the money going to solicitors who spend time negotiating the price of the lease. Surely we – as civilised human beings – can simply discuss the price informally and make an agreement? That way when we instruct solicitors to deal with all the paperwork, it will be quicker (good for both of us) and cheaper (good for me).

Informal leasehold purchase

Well, I’m pleased to say that it is possible. Rather than serving a ‘Section 42’ notice on my freeholder, I dropped him an email. I explained the situation and we came to an agreement on getting the flat valued. When the valuation report came back, we had a discussion and agreed a final price.

We’re now engaged in the boring back-and-forth of getting things finalised, but I’m pleased to say that by doing DIY negotiations, we’ve managed to agree a fair price and save me a bit of money in the process. But how many people know this is possible? I’d guess not many, as the ‘informal leasehold purchase’ process isn’t widely publicised, and (for good reason) not many solicitors want to draw your attention to it.

The informal route might not always be desirable – if your stomach turns at the thought of having to negotiate money or even if you just don’t have the time – but it’s certainly an option I’d urge you to consider. Solicitors do a great job sometimes, and they’re crucial for hammering out the nitty-gritty, but sometimes we can save a lot of money by simply talking to each other.

With my new-found DIY skills, I’m keen to see if there are any other situations where we could cut out the middle man and discuss things to save money.


Which? worked hard to open up the conveyancing market and to promote diy. So refer please to “You or your conveyancer” not “Your solicitor”.


Whether or not you intend to use professionals, it is always a good idea to start with the Leasehold Advisory Service’s calculator at http://www.lease-advice.org/calculator/

Tony Lilleystone says:
5 September 2012

Definitely a good idea to use the LAS calculator which is free to use and an excellent starting point for getting an idea of the premium’ range that a freeholder might expect to charge. Bear in mind that on line calculators are only a guide to the cost of renewing a lease, not the actual costs.

[We have removed the link from this comment as it breaks our commenting guidelines. Thanks, mods.]

myleasehold ltd says:
10 September 2012

Informal negotiations can be a great way of saving money on fees, however Tenants should always be wary of exploitation when they are not getting professional advice in negotiations.

Sometimes problems or onerous clauses within a lease can remain where they could have been resolved, for example, and there are certain Landlords who will seek to introduce new provisions to the lease that make it less attractive.

A ‘diy’ negotiation may be a viable option in some instances – but in all cases, proceed with caution.

John Francis says:
22 October 2012

Re;Informal leasehold purchase for a semi-detached house.
a).Is the procedure the same as for a flat?
b).Is there a standard format letter that can be used(I am not legally minded) ?
c).If the cost is too high,can I then ask for an extension of my lease?


Bestg to Google ‘Leasehold Advisory Service’ for this sort of thing


I have a similar question on lease valuation.

I’ve been quoted a price to buy the freehold for my house. The price works out as about 50 years worth of the annual ground rent charge (not taking into account inflation).

The Leasehold Advisory Service couldn’t tell me if this was a reasonable price or not & said I’d have to contact a surveyor to investigate.

Is it not possible to judge the offer solely on the figures above?

If not, are there some simple tables of going rates somewhere to judge if the offer is reasonable or not without having to hire a surveyor or solicitor?

ps: The term of the lease is 999 years

Thanks in advance,

myleasehold says:
5 December 2012

There aren’t any simple tables of going rates I’m afraid, but generally when compensating the freeholder for the loss of ground rent income, the rent is capitalised to determine what it is worth today in one lump sum, rather than spread out over the rest of the term.

With a lease of that length (999 years), the freehold generally has a nominal value apart from the ground rent income. It depends on the sums of money involved as to whether or not it would be worth your while taking some professional advice.

sara quinlan says:
4 April 2013

we own our house that has only 79 years left on the leasehold. The freehold is owned by the local council. We have been offered to purchase both. I can understand why we should buy the freehold from the council but do we need to buy the leasehold, as my understanding is that the leasehold will revert back to the freeholder in 79 years i.e. me or the more likely the new owner of the house?



1 There is an intermediate lease (which might involve other properties betwee your lease and the freehold

2 The Council is trying to be helpful by suggesting that you get your leasehold off the Land Register at the same time as buying the freehold.

fibee says:
23 April 2013

I used the calculator has suggested on these comments and it estimated my cost of almost double of what i have had to pay !!! so whilst it is good in theory it is no where conclusive, i purchased my 90 year extension for £2000, calculator estimated £4000 !!!!!!

matchu says:
11 December 2014

may i ask how many years you had left? I have 71 years and I’m thinking I need to extend the lease asap but I have no idea how much it will cost!! My flats worth about 104,000.

StuMac says:
30 July 2014

OK. I’m going to try the informal route because I want to put my flat on the market and the freeholder has said that she is happy to negotiate (after she seeks some advice)

I’ve got 71 years left on my lease and pay £75 ground rent, i’ve been quoted a £9000 (ish) premium for going down the statutory route but I can’t find any examples online on what sum I should be looking at to just extend my current lease to 99 years.

I’m thinking £2000 and double the ground rent to £150 as an initial offer.

Any thoughts or comebacks?



I am in the processing to trying to negotiate the lease extension premium with the freeholder before purchasing the property. He initially quoted £50,000 plus £200 ground rent and his legal fees. I emailed him back and asked for it to be reduced to £40,000 with zero ground rent. He has come back with an offer of £45,000 and £200 ground rent and legal costs. I still think this is too high. What should I do now? The flat has 47 years left on it.