What is Lease Extension and when should you be considering it?

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If you own a Leasehold property, it is likely that you will need to consider extending your Lease at some point. Lease Extension

You may be struggling to re-mortgage or sell your Leasehold property because of the remaining term of your existing Lease. Alternatively, you may wish to take advantage of dealing with the extension of your Lease before its remaining term of years becomes a problem.

Typically, a Leasehold property will be subject to a Lease term of 99 or 125 years from the date the property was built. As the remaining Lease term diminishes, the need to consider a Lease Extension becomes more important.  For example, a lender may not grant a mortgage in respect of the property if the Lease term has less than 70-80 years remaining.  In addition, the premium payable to the Freeholder will increase as the term of years remaining reduces.

The Leasehold Reform, Housing and Urban Development Act 1993 (‘LRHUDA 1993’) gives an entitlement to Leasehold property owners to a Lease Extension.  The legislation provides that a Leaseholder will be entitled to claim a Lease Extension from their Freeholder, provided they meet certain criteria:

  • The Leaseholder must have a “long lease” of the flat – this generally means a Lease whereby the original term was for 21 years or more; and
  • The Leaseholder must have owned the property for at least two years.

LRHUDA 1993 also sets out requirements as to the terms of the new Lease. A Leaseholder will be entitled to:

  • A term of 90 years on top of the remaining term of the existing Lease (for example, a Lease having 70 remaining will be extended to a term of 160 years remaining);
  • A reduction in Ground Rent to one peppercorn per annum (zero).

Making a claim, or responding to a claim, for a Lease Extension requires strict compliance with the procedural steps and time restrictions set out within LRHUDA 1993.

At Bennett Griffin LLP, we have extensive experience representing both Leaseholders and Freeholders in Lease Extension cases.

For further information please contact Nick Tompkin.


The information contained in this article is for general guidance only and is not intended to be legal advice. Professional advice should always be taken on the application of the law in any particular situation.