Avoid these 10 expensive mistakes that leaseholders make when extending their lease, from using general solicitors to waiting too long and accepting the freeholder's first offer.
The single most common and expensive mistake. Every year below 80 years adds marriage value and reduces mortgageability. Leaseholders who dismiss the issue until they are trying to sell often face a shock — or cannot sell at all.
Leasehold enfranchisement is highly specialist. A general property solicitor will charge similar fees but produce inferior results, miss procedural deadlines, and fail to spot issues a specialist would catch immediately. Always use a firm where enfranchisement is a significant part of their practice.
Many leaseholders instruct a solicitor first and a surveyor second. The correct order is reversed: instruct a surveyor to advise on the likely premium before committing to the statutory process. This ensures your Section 42 notice contains a realistic opening offer.
An invalid notice — missing required information, served on the wrong party, or incorrectly timed — can be treated as withdrawn, wasting costs and alerting the freeholder prematurely. Never serve a Section 42 notice without specialist legal advice.
Where the freeholder cannot be found, special court procedures are needed. Check the Land Registry for the freeholder's registered details before instructing anyone.
Freeholders routinely open negotiations well above the RICS-calculated figure. Studies suggest initial freeholder demands exceed eventual Tribunal awards by 35–50% on average. Always have your own surveyor's valuation before negotiating.
The majority of lease extension premiums settle at 60–75% of the freeholder's initial counter-notice figure following professional surveyor negotiation.
The premium is just one cost. Failing to budget for all professional fees means you may be unable to proceed — which has its own legal and financial consequences.
Under current rules (before the 2024 Act is fully in force), you must have owned the property for two years. Check whether the relevant 2024 Act provision is in force before assuming you can extend immediately after purchase.
Informal (non-statutory) extensions give you no statutory protection. The freeholder can withdraw at any time, set their own terms, and may include unfavourable new covenants including escalating ground rents. Many leaseholders who went informal ended up paying above-market premiums.
Your current lease may contain unusual clauses relevant to the extension. Knowing what you have helps ensure the new lease properly addresses any issues in the existing document.
Waiting too long. The single most costly mistake is allowing a lease to fall below 80 years before starting the extension process. Below 80 years, marriage value kicks in and can add tens of thousands of pounds to the premium. Extensions can take 6–12 months from instructing a surveyor to completion, so starting when the lease hits 85 years is the minimum — 90 years is safer.
You can, but it is rarely advisable. Without a RICS surveyor, you have no independent basis for evaluating the freeholder's figure and no standing to challenge an inflated premium. Many leaseholders who negotiate directly either overpay significantly or accept unfavourable lease terms (non-standard clauses). Always obtain at least one independent surveyor's valuation before negotiating.
Missing the statutory deadlines after serving a Section 42 notice is serious. If you fail to apply to the Tribunal within two months of receiving the freeholder's counter-notice, or miss the six-month deadline for completing the transaction, you lose the benefit of the notice. You would need to wait 12 months before serving a fresh notice, during which time the lease shortens further and premiums rise.
Not usually. The purchase price discount on a short lease property is typically smaller than the cost of extending it, and you cannot extend the lease until you have owned for two years (this qualifying period has been removed for some buyers under the 2024 Act — confirm with your solicitor). Buying a property with under 80 years and then extending is almost always more expensive than buying one with a longer lease.
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Calculate Now →This article is for general information only and does not constitute legal or financial advice. Always consult a specialist solicitor and RICS surveyor before taking any action.
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