The Informal (Non-Statutory) Lease Extension Process

If you're considering extending your lease, there are two ways to do it: the formal statutory route and the informal lease extension process (often referred to as a non-statutory lease extension). The primary reason to go down the informal route is that you do not qualify for the formal statutory process, such as if you own a shared-ownership property and haven't staircased to 100%.

Unlike the formal route, which is governed by strict legislation and procedures, an informal lease extension involves negotiating directly with your freeholder. While this can offer flexibility regarding the lease length and terms, it also comes with significant risks.

With no enforceable statutory framework compelling your freeholder to agree to terms or adhere to deadlines, pursuing a non-statutory lease extension means you could face lengthy delays, unfavourable clauses, or find that negotiations stall completely.

In this article we'll explain how to safely navigate informal negotiations, the pros and cons of the statutory route, the costs, and timeframes.

Need further help? For more information on other types of lease extensions, including guides on formal lease extensions and dealing with an absent freeholder, visit our comprehensive guide to leasehold extensions.

What are the pros and cons of the informal route?

Pros

• Eligibility: You can extend your lease even if you aren't eligible for the formal statutory process, although the majority of leaseholds are now eligible since the removal of the 2-year rule.
• Flexibility: You can agree on a bespoke, more favourable informal deal with your freeholder if you have a good relationship.
• Share of Freehold: Share of freeholders can often extend the lease to 999 years for zero premium.
• Upfront Savings: Save money by not paying solicitor fees for drafting and serving a formal Section 42 Notice.

Cons

• No guarantees: The freeholder can withdraw from negotiations at any time, leaving you exposed to starting the formal route and writing off the costs spent to date.
• Unfavourable terms: While they cannot introduce new ground rent escalations, the freeholder may demand an inflated premium, insert expensive consent fees for property alterations, or add restrictive covenants, things you can't do in the property, that were not in your original lease.
• Ground rent trap: Your ground rent might stay at the old rate until the pre-existing term expires, whereas a formal extension guarantees your ground rent is reduced to a peppercorn immediately on completion.
• No tribunal fallback: You cannot take the freeholder to a tribunal to force a fair price if negotiations break down.

The non-statutory lease extension process

Unlike the statutory route, the steps aren't legally prescribed, but they typically follow this sequence:

1. Make an offer (The Informal Lease Extension Letter)

The process often begins when either the freeholder makes an offer to extend your lease, or you approach them with your own proposal via an informal lease extension letter. It is common for freeholders to make an unsolicited informal offer, perhaps stating: "The Freeholder has carried out a valuation and can extend your lease to 99 years for the sum of £15,000..."

You are not obligated to accept this. You may feel the proposed premium is too high, or that pursuing the formal statutory route would provide better long-term value (e.g., a guaranteed 90-year addition and peppercorn ground rent).

On the other hand, if you initiate an informal offer, you can contact your managing agent or liaise directly with your freeholder. You can find their contact details by downloading the title deeds from the Land Registry.

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2. Instruct your RICS Surveyor

Some leaseholders choose to skip this stage because it isn't mandatory or they are happy with the offer from the freeholder. However, because the informal route relies entirely on negotiation, having an expert surveyor accurately value the premium and advise if a freeholder's offer is reasonable is usually invaluable.

The best strategy is to ask your surveyor to provide a formal valuation for the statutory 90-year extension alongside the valuation for the informal term offered by the freeholder. This allows you to directly compare which offer provides better value.

3. Instruct your Solicitor

Once you've agreed terms, you need to instruct a specialist lease extension solicitor to handle the conveyancing. Your solicitor's role includes obtaining necessary documents, liaising with the freeholder's solicitor, and critically reviewing the proposed new lease to ensure no unfavourable clauses are slipped in.

Here is the informal lease extension conveyancing process:

• You provide your ID and proof of the funds you're using to pay for the extension.
• Your solicitor reviews the lease and confirms the clauses.
• You sign the lease and have your signature witnessed.
• (If required) Your solicitor drafts a Deed of Substituted Security for your mortgage lender.
• You pay your premium to your solicitor.
• Your solicitor sends the premium funds to the freeholder, dates the deeds, and you have formally completed.
• Your solicitor submits the deeds to HM Land Registry and handles any requisitions they may have.

An exception to the above is if you have a Tyneside Lease. The difference here is that both leaseholders will want to extend their leases simultaneously.

How much does an informal lease extension cost?

When budgeting for a non-statutory lease extension, you need to account for two separate elements: the lease extension premium (the agreed purchase price paid to the landlord for the extra years) and the professional legal and valuation costs. Because an informal agreement falls outside statutory legislation, there is no legal ceiling regulating fees, meaning you are largely subject to the freeholder's commercial terms.

Excluding the premium itself, the total professional legal and valuation expenses for an informal lease extension typically range between £2,000 and £4,000 (inc. VAT). Breaking this down into itemised stages:

1. Your RICS Leasehold Valuation: £600 to £900

Although an informal extension is negotiated privately, having an independent RICS chartered surveyor inspect the flat gives you an objective benchmark. They will calculate what the statutory 90-year premium would cost, allowing you to establish whether the freeholder's informal quote offers genuine value or an inflated price. As covered above, if the premium is under £5,000 and extends the lease beyond 100 years, you may choose to skip this fee to keep costs proportionate.

2. Freeholder's Valuation Fee (if applicable): £600 to £900

If you initiate negotiations with an informal lease extension letter, the freeholder may insist on instructing their own surveyor to value the flat before making a formal offer. In almost every non-statutory deal, the landlord makes reimbursement of their valuation costs an express condition of proceeding.

3. Your Solicitor's Conveyancing Legal Fees: £820 to £1,200

Because there are no statutory notices (like a Section 42 Notice) required, legal work begins directly with drafting and conveyancing. Your solicitor will review the landlord's draft lease (or Deed of Surrender and Regrant), verify that no hidden fees or onerous clauses have been introduced, report to your mortgage lender, and formally complete the transaction.

4. Freeholder's Solicitor Legal Fees: £820 to £1,200

Even though the 1993 Act doesn't apply, private landlords almost always make it a mandatory contractual condition that you pay their reasonable legal fees. Their solicitor will draft the new lease documentation, handle title enquiries, and coordinate completion with your legal representative.

You can read our complete guide on: What are classed as reasonable fees for a freeholder?

5. Completion Costs and Disbursements

• HM Land Registry Registration Fees: Between £45 and £150 to register the new lease and update the title register, depending on the agreed premium band.
• Stamp Duty Land Tax (SDLT): Most extensions fall well below standard residential SDLT thresholds, but liability can arise if the agreed premium is substantial or the flat is a buy-to-let or second home.
• Mortgage Lender Fees (Deed of Substituted Security): If you have an active mortgage on the flat, the lender must formally consent to the lease surrender and regrant. Lenders typically charge an administrative fee of £50 to £150, alongside your solicitor's drafting fee for the Deed of Substituted Security.
• Standard Legal Disbursements: Approximately £15 to £20 per client for online AML/ID verification, £6 to £10 for Land Registry official copy entries, and £40 to £50 inc. VAT for telegraphic bank transfer fees.

You can compare the informal costs to the statutory route here: What are the formal leasehold extension costs.

How long does an informal lease extension take?

The process can take anywhere from a few weeks to a couple of months, provided negotiations proceed smoothly.

The informal lease extension timeline is entirely dependent on how quickly you and your freeholder can agree on terms. Because this is a non-statutory lease extension, there are no legal deadlines binding the freeholder to respond to your informal lease extension letter or complete the transaction within a set timeframe.

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Arrange a free consultation with one of our experienced lease extension team on:

• Statutory or Non-Statutory Lease extension.
• Selling a leasehold property with a short lease.
• Extending the lease at the same time as you sell.
• Buying the freehold (collective enfranchisement).

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