Answers · UK 2025/26
How much does a statutory lease extension cost in the UK?
A statutory lease extension adds 90 years to your existing lease and reduces ground rent to zero (peppercorn). The premium is calculated using a statutory formula. For leases over 80 years with low or zero ground rent, costs can be a few thousand pounds plus legal fees. Short leases or high ground rent increase costs significantly.
Full answer
**What does a statutory lease extension give you?** Under the Leasehold Reform Housing and Urban Development Act 1993 (for flats), you are entitled to: - An additional **90 years** added to the existing term - Ground rent reduced to **a peppercorn (£0)** for the remainder - The right to a statutory extension after only 2 years of ownership (requirement removed by 2024 Act — from commencement date, extension available immediately) **How the premium is calculated** The premium has three elements: 1. **Ground rent capitalisation**: present value of lost ground rent over remaining term 2. **Reversion value**: value to freeholder of getting property back at end of current lease, discounted 3. **Marriage value**: 50% of any increase in property value, only applicable if lease has fewer than 80 years remaining **The 80-year cliff** Once a lease falls below 80 years, marriage value applies and extension costs rise steeply. The longer you wait after 80 years, the more you pay. Always extend before reaching 80 years. **Example: Emma, 95-year lease, £0 ground rent, flat worth £250,000** - No ground rent → ground rent capitalisation = minimal - Long lease → reversion value = small - Above 80 years → no marriage value - Estimated premium: **£2,000–£5,000** - Plus legal fees (lessee): ~£1,500–£2,500 - Plus lessee pays freeholder's reasonable legal/surveying fees too **Example: James, 73-year lease, £200/year ground rent, flat worth £350,000** - Marriage value applies - Extension might add £25,000 to value; 50% marriage value = £12,500 - Ground rent capitalisation: ~£3,500 - Reversion: ~£2,000 - Estimated premium: **~£18,000** - Plus professional fees ~£4,000 **Process** 1. Obtain a surveyor's valuation report (RICS-qualified leasehold specialist) 2. Instruct a solicitor experienced in leasehold extension 3. Serve a Section 42 notice on the freeholder with an opening offer 4. Freeholder responds with counter-notice within 2 months 5. Negotiate; if no agreement, apply to First-tier Tribunal **Mortgage considerations** Most lenders require at least 70 years remaining on a lease (often more) to grant a mortgage. Extending the lease before selling significantly increases salability.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.