Lease Extensions by Kerry Hicks

Nb. The following is for guidance only and is in general terms in preparation for the seminar. Any Leaseholder intending to proceed with a potential lease extension should take independent legal advice


1. Enhanced terms

No ground rent and extension of additional 90 years term in addition to the current unexpired term

2. Lender Requirements

To ensure the property is marketable and satisfactory security. Requirements vary from lender to lender and from time to time but example of current requirements below for sample lenders:-


70 years unexpired from the date of the mortgage

Kent Reliance

75 years un-expired subject to at least 50 years at the end of the mortgage term

Nat West

Mortgage term plus 30 years


55 years un-expired subject to at least 30 years at the end of the mortgage term

3. Marketability

The longer the lease term, the higher the value is likely to be and more appealing to potential buyers.

4. Cost

The shorter the unexpired term, the more expensive the premium is likely to be as more beneficial to the leaseholder to extend and potentially greater loss to landlord.

5. Other Matters

May be able to agree to remedy potential defects in the Lease at the same time

Minor amendments

Update Lease


Your legal advisor will guide you on this in detail but requirements include

Ownership for 2 years (exceptions eg on assignment of the right or if informal extension)

Long lease (term exceeding 21 years when granted)

Self contained unit


Solicitor/legal advisor

Preparation and service of notices

Preparation or approval and conclusion of deed



Indicate sensible premium (and advise as to the best and worst case scenarios)

Negotiations with Landlord’s surveyor after service of S42 Notice if formal procedure

May be required to attend tribunal if terms in dispute


Leasehold Advisory Service

Good source of general information




Two types of lease extension (Formal and Informal)

Which do you chose?


Several Factors

If the Leaseholder does not qualify under the formal procedure, the only option is to proceed informally

Nb: formal procedure is not available to shared ownership leaseholders unless they have staircased to 100% ownership


Only redress if terms cannot be agreed informally is to then commence formal procedure and seek determination by a tribunal


Fixed time periods within the formal procedure


Flexibility (terms and timescales)






Ability to assign the benefit of the right (formal procedure). Ideal if the lease needs to be extended to satisfy an incoming buyer’s lender.




Leasehold Reform Housing and Urban Development Act 1993


Gather information

Relevant parties to be involved



S42 initial notice by Leaseholder

Setting out proposals

Gives Landlord at least 2 months to respond


S45 counter-notice by Landlord

admit or not admit claim.


If admit claim and all terms accepted by the Landlord, the draft papers are drawn up and agreed and the deed concluded.


If admit claim but some terms not agreed, counter-proposals and set out and parties negotiate


If claim not admitted, counter-notice must set out reasons (eg redevelopment intended)


Negotiation if required

period of between 2 and 6 months and after initial 2 months either party can apply to tribunal to determine an issue


If Landlord does not serve a counter-notice by the date specified, the Leaseholder can apply to tribunal for vesting order on the terms set out in S42 notice



Not restricted to criteria above

Only option available to shared owners who have yet to staircase to 100% ownership

More flexible timescales

May agree additional terms

Usually still end up with 90 years additional term and a peppercorn rent



Valuation fee

Try to agree fee at outset but this will increase if negotiation is required or attendance at tribunal etc.

Solicitors fees

Again try to agree at the outset (usually expected to meet Landlord’s legal fees as well as own)



Generally assessed by professional valuer in accordance with the legislation relating to lease extensions.


Loss to Landlord re reversion (difference between the two)

Loss of ground rent for remainder of term and new term

Delay before reversion

Marriage value

Increase in value from grant of extended lease (shared between parties)


To Landlord for any other loss/diminution of value


If you’d like further assistance in this matter please contact Kerry Hicks Associate by emailing her at or call on 020 8799 1860