Leasehold House Lease Extension Solicitors
Extending the lease on a leasehold house is a process that allows the homeowner to add years to their existing lease term.
This is often done to increase the property's value, make it easier to sell or mortgage, and provide long-term security, preventing the property from eventually reverting to the freeholder.
Leasehold houses are comparatively rare in the England and Wales property market (though notably present in properties built under schemes like Help to Buy); owners generally have the right to either extend their lease or buy the freehold.
While the goal is similar, the leasehold house lease extension process has some significant key differences compared to extending the lease on a flat, which is governed by different legislation (the Leasehold Reform Act 1967 for houses vs. the Leasehold Reform, Housing and Urban Development Act 1993 for flats).
Crucially, for eligible leasehold house owners using the formal statutory route, there is no premium payable to the freeholder for the lease extension itself – a major distinction from flat lease extensions where the premium is often the largest cost. However, you will still need to cover other costs, such as the freeholder's legal and valuation fees, and your own professional fees.
For a leasehold house lease extension:
- Conveyancing Solicitors: Needed.
Unlike flats, for statutory house lease extensions:
- Lease Extension Valuation Premium: Not needed (no premium payable).
Legislation underpinning Lease Extensions for Leasehold Houses
The statutory right for eligible owners of leasehold houses to extend their lease is currently primarily governed by the Leasehold Reform Act 1967.
It is crucial to note that while the Leasehold and Freehold Reform Act 2024 has received Royal Assent and aims to make significant changes to leasehold law, most of the key provisions specifically impacting the terms, costs, and eligibility criteria for statutory leasehold house lease extensions under the 1967 Act are NOT yet in force as of May 2025.
The 1967 Act itself has been subject to various amendments over the years, notably by legislation introduced in 1993, 2002, and 2022, which have modified aspects of the leasehold enfranchisement and extension framework.
Therefore, as of now, the process, eligibility tests (except the abolished two-year ownership rule), and outcome (a 50-year extension with no premium but a modern ground rent) for statutory leasehold house extensions generally still follow the framework set out in the 1967 Act, until further parts of the 2024 Act are formally commenced.
The Leasehold and Freehold Reform Act 2024 was passed on the 24th May 2024, but is not yet in effect and the date for this is not yet clear. We will update our content as and when the finalised legislation is published. Read more - Expected changes
Important: Ensure Bills are Paid
Please note that you must ensure that you have paid any ground rent or other charges due to your landlord, with no amount outstanding, otherwise your application for a lease extension can be legally refused.
Eligibility Criteria for Leasehold House Lease Extension
To qualify for a statutory leasehold house lease extension, you must meet certain criteria. The key eligibility criteria include:
- No Minimum Ownership Period:
Since 31st January 2025, following the commencement of a provision in the Leasehold and Freehold Reform Act 2024, you are not required to have owned your leasehold house for at least two years before you can make a statutory claim to extend your lease. You can make a claim as soon as you are the registered legal owner.
- Original Lease Term:
The original lease granted for the house must have been 'a long lease', meaning it was for a term of more than 21 years.
- Tenant Status:
You must not be leasing the house to a subtenant who themselves has the right to extend the lease or buy the freehold under the Leasehold Reform Act 1967.
Additionally, under the current Leasehold Reform Act 1967 framework, your house must also typically meet certain requirements related to its value and the rent paid:
- Low Rent Test:
The annual rent you pay must be considered 'low rent' based on specific criteria defined in the 1967 Act, which often relate the rent to the property's rateable value.
- Rateable Value Limits:
The house must have a rateable value below certain prescribed limits set by the legislation. These limits vary depending on when the lease was granted.
While the Leasehold and Freehold Reform Act 2024 is intended to abolish these low rent and rateable value tests, this change is not yet in force. Therefore, you must still currently satisfy these criteria to be eligible for a statutory claim under the 1967 Act.
Certain types of leases and properties are also excluded from the right to a statutory leasehold house lease extension. These include:
- Leases where the letting of the house is just an add-on to the letting of other land and premises.
- Leases granted by a charitable housing trust for the purposes of its charitable functions.
- Some shared ownership leases (though the 2024 Act intends to make changes here when in force).
- Leases of Crown land (although the Crown can permit buying the freehold, statutory extension rights may be excluded).
- Some leases where your landlord is a local authority or other public body and the land is needed for development.
It is highly advisable to instruct a specialist leasehold solicitor with experience in leasehold houses. They can review your specific lease and circumstances to confirm your eligibility.
- RICS Valuers for the lease premium.
- Handling of the Section 42 Notice.
- Negotiations.
- The full Lease Extension process.
- Tribunal cases.
The Formal Leasehold House Lease Extension Process
Initiating the formal process provides certainty over your right to extend, provided you meet the eligibility criteria. Here are the key aspects of the statutory process:
Initiating the Claim: Serving the Tenant's Notice (Form 1)
The formal process begins when you, as the eligible tenant, serve a statutory 'Notice of Tenant's Claim' (formally known as Form 1) on your freeholder under the Leasehold Reform Act 1967.
- This notice must be completed accurately and include specific details and evidence to support your claim, such as proof of your ownership, details of the original lease, and information to demonstrate you meet the eligibility criteria (e.g., low rent and rateable value tests).
- Unlike the Section 42 notice used for flats, if your freeholder disputes the validity of your Form 1 notice, you can typically serve a second notice without affecting your overall claim, which provides a degree of flexibility.
- There are strict rules regarding who must be served with the notice (potentially intermediate landlords as well as the freeholder) and the method of service itself.
The Formal Process Timeline
Once your notice is validly served, a statutory timetable begins. The Act views this as establishing a contractual relationship where the freeholder is obliged to grant the extension, provided you follow the correct steps and meet the conditions. Key stages and timelines include:
- Your freeholder can serve a notice requiring you to prove your title to the lease. You typically have 21 days to respond after receiving this notice.
- The freeholder must serve a 'Notice in Reply' within two months of receiving your claim notice. If they don't, you can require them to state their proposed changes to the lease terms and any other terms they seek in the new lease, and they must respond to this further notice within four months.
- Once terms are agreed or determined, the freeholder prepares a draft new lease. You must return this draft, with any amendments you propose, within 21 days. If you don't respond, you are assumed to approve the draft.
- Either you or your freeholder can then serve a notice requiring completion of the lease extension. Completion usually takes place on the first working day after a period of 4 weeks from this notice has expired.
- If either party defaults on their obligations, the other party can serve a minimum of two months' notice specifying the default and requiring it to be made good before the expiry of the notice.
Payable Costs
A major difference between extending a lease on a leasehold house under the 1967 Act and extending a flat lease under the 1993 Act is the cost structure. For a statutory house lease extension:
- You do not pay a premium for the 50-year extension term itself. The right to the extension is granted by the Act without a capital sum for the years added.
- However, you are still responsible for paying certain costs. These typically include your freeholder's reasonable legal costs incurred in investigating your right to extend the lease and their reasonable costs for the legal work involved in granting the new lease itself (but generally not their costs for negotiating the terms).
- You are also responsible for paying your own legal costs for handling the process.
- Unlike flat lease extensions, where a surveyor's valuation is needed to calculate the premium, for house extensions under the 1967 Act, where no premium is payable for the term, a formal valuation of the extension premium is not required. However, a valuation might be needed for other reasons related to the process or future ground rent determination if disputed.
Ground Rent After Extension
Under the current statutory process (1967 Act), the extended 50-year lease is granted at a 'modern ground rent'. This rent is determined based on the value of the site at the time the extended lease commences and can be significantly higher than the original ground rent.
It is a key intended change under the Leasehold and Freehold Reform Act 2024 that all statutory extensions (including for houses) will be at a peppercorn ground rent (effectively zero).
However, this provision is not yet in force for house extensions as of May 2025. Therefore, modern ground rent applies to statutory extensions under the current 1967 Act rules.
- Expert panel of conveyancing solicitors, with local knowledge.
- Specialists in lease extensions.
- Fixed, competitive legal fees.
- We guide you through every step of the way.
The Informal Leasehold House Lease Extension Process
Alternatively, you can attempt to negotiate an extension directly with your freeholder outside of the formal statutory framework. This is known as the informal process.
With an informal agreement, no legal rights or protections govern the negotiation. The terms of the lease extension (e.g., length of the extension, amount payable, future ground rent) are entirely subject to negotiation and the freeholder's willingness to agree. They can propose any terms they wish and are not obliged to grant any extension at all.
Pros of the Informal Process
- It might potentially be quicker to complete than the formal statutory process if negotiations proceed smoothly.
- It might potentially be cheaper if you can negotiate favourable terms, though this is not guaranteed.
- There might be flexibility in negotiating a different number of extra years on the lease than the statutory 50 years (or 990 years when the 2024 Act provisions are in force).
Cons of the Informal Process
- It might be more costly than the formal process if the freeholder is difficult or demands unreasonable terms/payments. Without professional advice, you are negotiating 'in the dark'.
- No surety at all of success; the freeholder can simply refuse to negotiate or reach an agreement at any point.
- The new extended lease contract might contain unfavourable clauses regarding future ground rent (which may not be reduced to a peppercorn) or other terms, as these are not governed by statutory protections.
- If negotiations stall or fail, you will lose any money invested in legal or valuation fees up to that point, as there is no statutory mechanism to recover costs.
Due to the lack of legal protections and the potential for unfavourable terms, it is highly recommended to seek specialist legal advice before entering into or agreeing to an informal lease extension for your leasehold house.
Alternatives to extending your lease: Buying the Freehold
Extending your lease isn't the only way to gain greater control and security over your leasehold house. The primary alternative for eligible house owners is to purchase the freehold title of your property, a process often referred to as enfranchisement or buying the freehold.
Under the 1967 Act, eligibility criteria for buying the freehold are largely similar to those for extending the lease. Key points to consider when comparing extending your lease versus buying the freehold:
No More Ground Rent
The main attraction of buying the freehold is that you become the outright owner of the land and property, meaning you will no longer have to pay any ground rent to a freeholder.
Cost Comparison
A statutory lease extension under the 1967 Act involves no premium for the term itself (only legal and other fees), but purchasing the freehold involves paying a purchase price to the freeholder for the land.
This makes buying the freehold typically a much more expensive upfront option than simply extending the lease.
For leaseholders who extend their lease informally, the ground rent will be restricted to zero on the new term, once the pre-existing lease has expired.
If you hold a pre-existing lease subject to the higher ground rent, you may wish to ask your freeholder about executing a deed of variation to bring your ground rent down to a reasonable level.
Ongoing Service Charges
Even if you buy your freehold, if your house is part of a larger estate with communal areas (like shared gardens, roads, or drainage), the original freeholder (or a management company) might retain rights to manage and charge for the maintenance of these areas through estate management charges (sometimes incorrectly referred to as service charges).
Future Control
Buying the freehold gives you complete control over the property and land in the long term, removing future interactions with a freeholder (except potentially for estate management).
Extending the lease provides security for the extended term, but the freeholder relationship continues.
- Fixed Fees.
- Leasehold Specialist Solicitors.
- RICS Surveyor Negotiations.
- Complicated jargon made simple.
- Preparation and serving of Section 42 Notice.
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
