Lease extensions are a familiar issue for flat owners, particularly where the remaining term is approaching, or has fallen below, 80 years. A shorter lease can affect the value of a property, the ability to sell it, and access to mortgage finance. There are two main routes available in England: a voluntary (informal) lease extension and a statutory lease extension. Although both can extend the lease, the process, protections and terms can differ considerably.
The Voluntary Route
A voluntary lease extension is agreed directly between the leaseholder and the freeholder, without invoking the formal statutory procedure. The parties are free to negotiate the length of the new lease, the premium, whether ground rent continues or is removed, and any changes to the lease terms. This route can be quicker and more flexible, and it may be available where the leaseholder does not yet qualify to use the statutory process.
The trade-off is that the leaseholder has no statutory protections. A freeholder is under no obligation to offer an extension at all, and is free to set the terms on which it is prepared to negotiate. This means a voluntary offer may include a shorter extension, a continuing or escalating ground rent, or other revised provisions. Any proposed terms should be reviewed carefully against the likely statutory outcome before they are accepted.
The Statutory Route
The statutory route is available under the Leasehold Reform, Housing and Urban Development Act 1993. A qualifying leaseholder has a legal right to extend their lease by 90 years on top of the existing term, with ground rent reduced to a peppercorn. The premium is assessed by reference to a statutory valuation formula, and there is a structured timetable with a mechanism for referring disputes to the First-tier Tribunal.
To qualify, the leaseholder must be registered as proprietor on the title register. The previous requirement to have owned the flat for two years was removed by the Leasehold and Freehold Reform Act 2024. Eligibility should still be checked carefully, as certain properties and tenancies are excluded from the statutory regime.
Because the right is statutory, the freeholder cannot simply refuse if the qualifying criteria are met. The process begins with a formal notice served on the competent landlord, who may then serve a counter-notice. If the parties cannot agree on the premium or other terms, the matter can be referred to the Tribunal.
The 80-Year Threshold and Forthcoming Reform
Under the current statutory valuation rules, the 80-year point is significant. Once a lease has fewer than 80 years unexpired, “marriage value” becomes payable as part of the statutory premium, reflecting the additional value created by the merger of the leasehold and freehold interests. This can materially increase the cost of extending, which is why many leaseholders are advised to act before the lease approaches that threshold.
It is worth noting that the Leasehold and Freehold Reform Act 2024 (LAFRA 2024) proposes to abolish marriage value entirely. The High Court upheld this provision in October 2025, dismissing human rights challenges brought by major freeholder groups. However, the valuation reforms in LAFRA 2024, including the abolition of marriage value, have not yet come into force. They remain dependent on secondary legislation, with implementation now unlikely before late 2026 at the earliest and possibly 2027–2028. Until commencement is confirmed, the existing statutory valuation framework continues to apply. Leaseholders weighing up whether to act now or wait for the reforms should take specific professional advice.
Share of Freehold
A voluntary lease extension is particularly common and often straightforward where the leaseholder also holds a share of the freehold. In these cases, the leaseholder effectively negotiates with themselves and the other co-freeholders, and there is typically no premium payable. Extensions of up to 999 years are commonplace.
The key practical consideration is that all co-freeholders must consent and sign the documentation if the freehold is owned jointly in your individual names. Where the freehold is held through a private company, the relevant company approvals are needed. If one co-freeholder is uncooperative or unreachable, the process can become complicated, and the statutory route may need to be considered as a fallback.
Which Route Is Right?
There is no single answer. A voluntary offer can be attractive where the terms are acceptable, the premium is reasonable, and a quicker outcome is wanted. The statutory route offers greater certainty, a guaranteed 90-year extension, peppercorn ground rent, and the protection of a formal legal process. However, it takes longer and involves specific procedural steps.
In practice, the two routes are often considered in parallel. A voluntary offer can be assessed against the likely statutory outcome to judge whether it represents fair value and whether the proposed terms are acceptable. Small differences in wording or valuation can have long-term consequences, so independent advice from a solicitor and a specialist valuer is important before committing to either route.
Lease Extension Solicitors in Kingston Upon Thames
At Rose & Rose, our Property team advises leaseholders on both voluntary and statutory lease extensions. Please contact us if you would like to discuss your circumstances.
