What is a lease extension?
A lease extension is a qualifying flat leaseholder's right to add years to their lease. Under the Leasehold Reform, Housing and Urban Development Act 1993, you can currently add 90 years to the existing term at a peppercorn (zero) ground rent, in exchange for a premium paid to the freeholder.
Every leasehold flat has a lease term that counts down over time. As the remaining term gets shorter, the flat becomes worth less and harder to sell or mortgage — which is why extending the lease is one of the most important rights a leaseholder has. A lease extension adds years back on and, under the statutory route, also wipes out the ground rent.
The statutory right under the 1993 Act
Under the Leasehold Reform, Housing and Urban Development Act 1993, a qualifying leaseholder of a flat can currently extend by 90 years on top of the existing remaining term, at a peppercorn (zero) ground rent, in exchange for a premium. The right is set out in Section 39 of the 1993 Act and is exercised by serving a formal notice on the landlord under Section 42. A "qualifying tenant" is broadly someone who holds the flat under a long lease (a term of more than 21 years). The premium is calculated in accordance with the Act, which is where valuation — and marriage value — comes in.
What the Leasehold and Freehold Reform Act 2024 provides for
The Leasehold and Freehold Reform Act 2024 provides for a package of reforms to make extending easier and cheaper. One is already in force: the two-year ownership requirement was abolished on 31 January 2025, so a qualifying leaseholder on a long lease can now claim straight away. Others — including a longer 990-year extension term — are not yet in force and depend on further regulations and commencement dates, so check the current position before relying on any specific reform; do not assume a change is in effect just because the Act has been passed.
When to think about extending
If you are buying a flat, the remaining lease term is one of the first things to check — our buying a leasehold flat checklist walks through it alongside the service charge questions. If you already own and your term is heading toward 80 years, getting a valuation sooner rather than later can save a significant sum. A lease extension is a legal transaction, and most leaseholders use a specialist solicitor and a valuer to handle the statutory notice and premium.
How this shows up in your service charges
A short lease and a high service charge often travel together — both are signs of a building where the leaseholder is on the back foot. Our free AI audit reads your service charge demand, accounts and lease and shows you, line by line, how much could be challengeable under the Landlord and Tenant Act 1985, so you go into any lease-extension negotiation with a clear picture of the building's finances.
Start my free audit