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Homeowner Warns of Failure to Monitor Lease Length

Owners of leasehold flats need to keep track of a crucial number – how many years they have left on their lease – and to act fast to extend it before it slips below 80.

The number of years left can prove crucial at the point of selling or remortgaging as a leasehold property theoretically gives owners the right to live there for only a limited time.

The land it stands on is owned by a freeholder or landlord who charges ground rent and will ultimately own the flat when the lease runs out.

Flat leases normally run for 99 or 125 years from when the property is built. Although, in theory, the flat is returned to the freeholder when the lease expires – leaving the person who has paid the mortgage empty-handed – in reality most leases are extended well before this happens.


The lease length is important as mortgage lenders have minimum requirements relating to the remaining term on the lease. If these cannot be met, they will not lend.

Halifax, for example, requires an unexpired term of at least 70 years at the time of application. Once it slips below 80, the costs to extend the lease can increase as the landlord can ask for a share of the extra value the extension will add to the property.


The good news is that the 1993 Leasehold Reform Act gives most flat owners the right to extend their lease by 90 years as long as they have owned the flat for at least two years.

A shrinking lease should not deter an owner from putting a property up for sale as it is still possible to start the lease extension process and assign the extension to the buyer.

Either way, extending a lease can be a time-consuming – and expensive – procedure. The sums for a lease extension are complicated and the cost will depend on the property value, location, ground rent and how many years are left on the lease.​


Jean Walker, partner of the real estate team at law firm SAS Daniels, says: ‘The price, known as the premium, increases if there is less than 80 years left to run on the lease, and clients would be advised to start the process well before this date.’

Another crucial element to factor in is the attitude of the freeholder – as the leaseholder will have to enter a process of negotiation.


The leaseholder and freeholder must each appoint a specialist surveyor and a solicitor to extend a lease. The surveyor’s job is to carry out a complex calculation, involving the current length of the lease, the property’s location, ground rent, the value of the flat with the lease as it is and the value of the flat when the lease is extended.

The leaseholder’s surveyor puts forward a figure to open negotiations and then the solicitor serves the freeholder a section 42 notice under the 1993 Leasehold Reform Act.

This triggers a timetable, giving the freeholder a two-month window to respond by serving a section 45 notice. This will include the freeholder’s opening price – inevitably much higher than the leaseholder’s offer. The surveyors from each side then negotiate until a price is finally agreed.

Walker says: ‘The process has strict time limits, so it is important that tenants are aware of these and the likely fees involved before they start the process. Clearly the more the price is disputed, the higher the surveyor’s and legal fees on both sides will be.’

If the two sides fail to reach an agreement within two months either party can make an application to the First Tier Tribunal – formerly the Leasehold Valuation Tribunal – which can rule as to what is a fair price. However, this will mean extra costs for both sides.

Alternatively, it can be worth contacting the freeholder directly to reach an informal agreement about a lease extension, sidestepping the hassle of issuing formal notices.

Either way, once a price has been agreed, the freeholder’s solicitor will draw up a new lease that the leaseholder’s solicitor will check over.

Once it has been signed by both parties the leaseholder’s solicitor will register the new lease with the Land Registry.

For an estimate of how much a lease extension will cost try the calculator on The Leasehold Advisory Service website ( Leaseholders will need to provide the property’s approximate value, the ground rent and the number of years left on the lease.

To find out more information about our price list or to make an enquiry about our services, please do not hesitate to contact us on 0845 838 5172 or email us at to discuss how you would like to proceed.



Lunn, E. (2016) ''We paid £12k just for a signature': Flat owners must keep track of years left on their lease - and act fast before it slips below 80',, 6 June [Online]. Available at: (Accessed: 6 June 2015).


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