If you're considering extending your lease, there are two main paths you can explore: the formal statutory route and the informal lease extension process. The main reason to go down the informal route is if you do not qualify for the formal lease extension process.

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

With no enforceable statutory framework compelling your freeholder to agree terms or adhere to deadlines, pursuing an informal extension means you could face lengthy delays or find negotiations stall completely.

We'll cover what you can do to help keep your informal extension on track and break down the pros and cons of choosing this route compared to the formal process.

What are the pros and cons of the informal route? 

How long does an informal lease extension take?

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

The informal lease extension timeline is entirely dependent on how quickly you can agree terms with your freeholder. Unlike the formal route, there are no statutory deadlines.

What is the informal lease extension process?

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

Freeholder or Leaseholder makes an offer

• The informal process often begins when either the freeholder makes an offer to extend your lease, or you decide to approach them with your own proposal.
• It is common for freeholders to make an informal offer, perhaps stating terms similar to: "I can confirm that the Freeholder has carried out a Valuation as requested to extend your lease to 99 years for the sum of £15,000..."
• You are not obligated to accept a freeholder's informal offer. You may feel the proposed premium is too high for the number of years offered, or that pursuing the formal lease extension route would provide better value (e.g., guaranteed 90 years and a peppercorn rent from completion).
• Alternatively, you can initiate the process by making an informal offer to your freeholder. You can do this by speaking to your managing agent (though some only handle the formal route) or by liaising directly with your freeholder.
• You can find their contact details on ground rent receipts or by downloading the title deeds for a small fee from the Land Registry.

Instruct your RICS Surveyor

• Before making or accepting an informal offer, it is highly recommended to instruct a RICS-qualified lease extension valuer. While many online calculators exist, they can only provide a rough estimate and cannot account for the specific factors of your property.
• Your surveyor can provide an accurate valuation of the premium you should expect to pay. They can advise if a freeholder's offer is reasonable or help you determine a fair informal offer to make. Because the informal route involves negotiation, having an expert surveyor's opinion and their assistance in negotiations is invaluable.
• Often, the best strategy is to obtain a formal valuation for the statutory 90-year extension first.
• You can then use this figure as a benchmark to assess if the informal offer for a different length of term provides comparable or better value. Your surveyor can assist with this comparison.

Instruct your Solicitor

• Once a premium and the key terms of the informal extension have been agreed in principle with the freeholder, you will need to instruct a specialist lease extension solicitor to handle the legal aspects.
• Your solicitor's role includes obtaining necessary documents, liaising with the freeholder's legal representatives, reviewing the proposed new lease deed (checking for unfavourable clauses, ground rent reduction to peppercorn or 0, etc.), managing the exchange of contracts (if applicable) and completion, and finally registering the new lease at the Land Registry.
• They will also handle the payment of the premium and ensure the freeholder's reasonable legal costs are paid on completion.
• Unlike the formal route, there are no statutory requirements for serving notices like Section 42 or Section 45, but your solicitor ensures the informal agreement is legally binding and correctly registered.

Informal lease extension costs

You can expect the total expense to range anywhere between £2,000 and £4,000, excluding potential Stamp Duty Land Tax and Land Registry fees which depend on the premium agreed and the property value.

The leaseholder will typically be responsible for both their own costs (like their solicitor and surveyor fees) and the freeholder's reasonable legal costs. However, the liability to pay the freeholder's costs should be abolished following new legislation, but it is currently payable now.

A breakdown of common informal lease extension costs includes:

• £600 to £900* - RICS lease valuation: The fee for your surveyor to provide a valuation. Note that if your freeholder refuses your offer and you do not proceed, you might still have to pay for the valuation fees.
• £820 to £1,200* - Leaseholder's solicitor fees: The legal fees for your solicitor handling the informal extension conveyancing. Get a value-for-money fee quote here.
• £820 to £1,200 - Freeholder's solicitor fees: The reasonable legal fees charged by the freeholder's solicitor for reviewing and completing the new lease documentation.
• £15 - Online ID fees.
• £6 - Official copy of register and title plan.
• £10 - Bankruptcy and priority Land Registry fee (if remortgaging).
• £TBC - Stamp Duty Land Tax (if applicable based on premium).
• £TBC - Land Registration fees.

*(Note: Costs marked with * are estimates and can vary. Always get a detailed quote from your chosen professionals).

For a more comprehensive guide to all potential expenses involved in extending your lease, including comparisons between formal and informal routes, see our dedicated article: Lease Extension Cost

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• Lease extension.
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We specialise in lease extensions and have RICS valuers for the premium/negotiation and solicitors for the section 42 notice and formal or informal extension. Request a tailored quote for:

• RICS Lease Extension Valuation or L2 Homebuyers Survey.
• Serving of the section 42 notice or section 13 notice on the freeholder.
• Negotiation with the freeholder (with the support of your RICS valuer).
• Completion of the legal work, including deed of variation.
• Application to Tribunal to determine the premium.
• Vesting order for absent landlords.