What Is a Statutory Lease Extension?
A statutory lease extension is your legal right to extend your lease by 90 years and reduce your ground rent to zero (a "peppercorn rent"). This right comes from the Leasehold Reform, Housing and Urban Development Act 1993, and it puts you firmly in control of the process.
Unlike informal (voluntary) lease extensions where your freeholder can refuse, set any price, or delay indefinitely, the statutory route gives you legal protections. Your freeholder must grant the extension, the premium is calculated using a formula set by law, and strict deadlines prevent delay tactics.
Think of the statutory lease extension as the "gold standard" for extending your lease. The informal route might look attractive on the surface, but it is often fool's gold: shiny at first glance, but when you dig into it, you discover the flaws.
A Simple Example
Imagine you own a flat with 82 years remaining on the lease. Under the statutory route, you serve a Section 42 notice on your freeholder. They have two months to respond with a counter-notice. After negotiation, you pay the agreed premium, and your lease becomes 172 years (82 + 90) with zero ground rent.
Your freeholder cannot refuse this extension. If they demand an unreasonable premium, you can apply to the First-tier Tribunal (Property Chamber) to determine a fair price.
Why It Matters to You
A statutory lease extension protects you in three important ways:
- Your freeholder cannot refuse. Under the 1993 Act, they are legally obliged to grant you a 90-year extension if you qualify.
- The price is based on law, not negotiation power. The premium is calculated using a statutory formula, not whatever figure your freeholder invents.
- Strict deadlines keep things moving. The statutory timetable prevents freeholders from indefinitely stalling, a common tactic with informal extensions.
- You do not need your lenders approval. A statutory lease extension gives you so many protections that lenders are forced to automatically accept the new lease.
Understanding your statutory rights could save you tens of thousands of pounds and protect your home for generations.
Who Qualifies?
Most flat owners in England and Wales qualify. The main requirements are:
- Long lease: Originally granted for more than 21 years
- Residential property: Must be a flat or maisonette
- Not a charitable housing trust: Special rules apply
Important change: On 31 January 2025, the two-year ownership rule was abolished. You can now serve notice as soon as your purchase completes and is registered at HM Land Registry.
Statutory vs Informal: Key Differences
We recommend the statutory route in 99% of cases. The protections are simply too valuable to surrender.
The 80-Year Threshold
When your lease drops below 80 years, an additional cost called marriage value kicks in. This can cause the premium to double or even triple. Acting before you cross this threshold is crucial.
Future Changes
The Leasehold and Freehold Reform Act 2024 will eventually extend the standard term to 990 years and abolish marriage value. However, these provisions are not yet in force. If your lease is under 85 years, we recommend acting now rather than waiting for reforms that may take years to implement.
Practical Approach
Start by understanding what your lease extension will cost. Our free lease extension calculator provides a personalised estimate in minutes.
Remember: it is like debt. The longer you leave it, the more expensive it becomes. A statutory lease extension gives you certainty, protection, and a fair price. That is why it remains the gold standard for leaseholders.
