10 Costly Mistakes to Avoid When Extending Your Lease

10 expensive mistakes leaseholders make when extending, from using general solicitors to waiting too long and accepting the first offer.

Most expensive leasehold mistakes are made before anyone has instructed a solicitor: leaving it too late, guessing at the cost or serving a notice without advice. Here are ten that cost leaseholders money, with what to do instead. They apply mainly to statutory lease extensions under the 1993 Act, though several apply equally to buying the freehold.

10 Mistakes That Cost Leaseholders Thousands

Mistake 1: Waiting too long

The most common and most expensive mistake. Once the lease has 80 years or fewer left on the date of your notice, marriage value is added to the premium, and on our calculator a £400,000 flat goes from about £11,500 at 81 years to about £21,900 at 80. Every year after that adds more, and lenders get more cautious as the lease shortens. Leaseholders who put it off until they are selling can face a buyer who cannot get a mortgage. Do instead: check your lease length today and serve notice before you reach 80 years; see the 80-year rule.

Mistake 2: Using a general solicitor

Lease extension is specialist work with strict notices and deadlines. A general conveyancer may charge similar fees but be less familiar with valuation arguments, tribunal practice and the traps in the notices. Do instead: ask how many statutory extensions the firm has done recently and whether they are members of a specialist body such as ALEP.

Mistake 3: Instructing the solicitor before the surveyor

The section 42 notice must state the premium you propose. If you put in a figure without a valuation you risk offering too much, or too little to be credible. Do instead: get a RICS valuer’s advice first so the notice contains a realistic opening offer (see how the premium is calculated).

Mistake 4: Serving the notice yourself

The notice must contain prescribed information, be served on the right people and follow the statutory timetable. A defective notice can be invalid, which can waste costs and set you back. Do instead: have a specialist prepare and serve it; see our section 42 guide.

Mistake 5: Not checking who the freeholder is

You need to serve the right landlord, and sometimes the freeholder is absent or cannot be traced. In that case the process is different: you may need to apply to court for a vesting order after a diligent search. Do instead: check the Land Registry title for the registered freeholder and any other landlords above you before you instruct.

Mistake 6: Accepting the freeholder’s first figure

The freeholder’s counter-notice will propose its own premium, usually higher than yours, and negotiation normally ends somewhere between the two figures. Accepting the first number without your own valuation means you cannot tell whether it is fair. Do instead: have your surveyor challenge the figures, especially the relativity and rates (see relativity tables).

Mistake 7: Under-budgeting

The premium is not the whole cost. You also pay your own solicitor and surveyor and, under the current law, the freeholder’s reasonable costs, which together typically add about £4,000–£8,000. If you withdraw after serving notice you can still owe the freeholder’s costs incurred to that point. Do instead: budget for both sides’ costs before you serve (see fees).

Mistake 8: Thinking you must wait two years

Until 31 January 2025 you needed to have owned the lease for two years before extending or buying the freehold. That rule has been abolished for both flats and houses. A buyer of a short-lease flat can now serve notice straight away, and should usually factor the cost into the price they pay. The Act’s valuation changes, such as abolishing marriage value, are not yet in force. Do instead: if you are buying, get the extension cost estimated before exchange.

Mistake 9: Assuming an informal extension is cheaper

An informal extension negotiated directly with the freeholder has none of the statutory protections: the freeholder can set the price and terms, can withdraw, and may insist on unfavourable terms such as escalating ground rent. It can sometimes save process costs, but only price it once you know what the statutory premium would be. Do instead: get a statutory valuation first and treat any informal offer against it.

Mistake 10: Not reading your existing lease

A statutory extension keeps the terms of your existing lease, so unusual clauses carry forward: escalating ground rent (which your extension would reduce to zero), restrictive covenants, repair obligations or a poorly drafted service charge clause. Do instead: read the lease, and ask your solicitor to flag problems you might want to address in the extension.

Mistakes Buyers Make Before They Own the Flat

• Not asking how long the lease is and what an extension would cost before making an offer.
• Not checking ground rent terms, in particular doubling clauses and RPI-linked reviews.
• Not reviewing the service charge history and planned works.
• Assuming reform will cut the cost by the time they need to extend: see the 2024 Act, where most of the valuation changes are not yet in force.