Comparison · Property · 2026
Right to Manage vs Lease Extension UK 2026: Which Should Leaseholders Do First?
Right to Manage and lease extension are two of the most important statutory rights available to English and Welsh leaseholders, but they solve completely different problems. RTM hands control of the building to the leaseholders; a lease extension lengthens an individual lease and cuts ground rent. The Leasehold and Freehold Reform Act 2024 is reshaping both processes through 2026 — here is how they compare and why many leaseholders end up doing both.
TL;DR - 30-Second Summary
- - Right to Manage: transfers building management to leaseholders; needs 50% participation; no purchase price, just legal/set-up fees
- - Lease extension: adds up to 990 years and removes ground rent on your own flat; premium depends on unexpired term and value
- - 2024 Act changes: marriage value being removed, 2-year ownership wait being scrapped, freeholder cost recovery being curtailed
Side by Side: RTM vs Lease Extension
| Feature | Right to Manage | Lease Extension |
|---|---|---|
| What it changes | Who manages the building | Length of your lease and ground rent |
| Ground rent effect | No change | Reduced to peppercorn (zero) |
| Purchase price | None — legal/set-up fees only | Premium calculated by statutory formula |
| Participation needed | 50% of flats in the building | Individual leaseholder acting alone |
| Typical cost | £1,500–£3,500 legal/formation fees | Premium + freeholder's costs (varies widely) |
| Mortgage impact | Indirect (better-run building) | Direct — resolves short-lease mortgage risk |
| 2024 Act changes | Non-residential floor space limit raised | Marriage value removed, 990-year term, no 2-year wait |
What Is Right to Manage?
Right to Manage (RTM) is a statutory right for leaseholders in qualifying residential buildings to take over management functions — repairs, insurance, service charge collection and day-to-day administration — from the freeholder, without needing to prove mismanagement. Leaseholders form an RTM company, serve formal notices, and (if at least 50% participate and the claim is not successfully challenged) take control after a statutory notice period.
RTM does not transfer ownership of the freehold, does not change any lease terms, and does not remove ground rent. It simply changes who runs the building, which is often the leaseholders' main frustration when service charges are high or repairs are neglected.
What Is a Statutory Lease Extension?
A statutory lease extension is an individual leaseholder's right to extend their own lease by serving a notice on the freeholder and paying a premium calculated using a formula that accounts for the unexpired term, ground rent and the property's value. Under the Leasehold and Freehold Reform Act 2024, the extension increases to 990 years (up from 90 years previously) and reduces ground rent to a peppercorn for the extended term.
Extending is particularly important once a lease drops below 80 years remaining, because marriage value historically applied below that threshold, sharply increasing the premium. The 2024 Act is removing marriage value from the calculation, which should make extensions cheaper for short leases once fully implemented.
Cost Comparison: A Worked Example
Consider a block of 10 flats where the freeholder's managing agent charges high service fees and one flat has a 75-year lease with £250 ground rent doubling every 25 years. Pursuing RTM might cost the group around £2,500 in total legal and formation fees, then leaseholders manage the block directly going forward — often reducing annual service charges once the managing agent's markup is removed.
The individual flat owner with the 75-year lease separately pursues a lease extension. Before the 2024 Act reforms, marriage value on a lease this short could add thousands of pounds to the premium; once marriage value is fully removed, industry estimates suggest savings of 10–30% on premiums for leases in the 60–80 year range, though the exact effect depends on individual circumstances and implementation timing.
Who Should Choose What?
- - Your building is poorly managed or service charges feel unjustified
- - At least half the leaseholders in the block are willing to participate
- - You want transparency and control over repairs and insurance
- - Your lease is approaching or below 80 years remaining
- - You are planning to sell or remortgage within the next few years
- - You have onerous or doubling ground rent
The two are not mutually exclusive. Many leaseholders in badly run blocks with short leases pursue RTM first to stabilise management, then extend individual leases once the building is on a sound footing.