Short leases are one of the biggest hidden risks in the West London property market. In areas like Hammersmith, Fulham, and Chiswick — where leasehold flats make up a large proportion of the housing stock — it's not unusual to find properties with leases that have dipped below 80 years. And once that happens, things get significantly more expensive.
At Hammersmith Surveyors, we advise leaseholders on lease extensions every week. Here's everything you need to know — clearly explained, without the legal jargon.
Why Does Lease Length Matter So Much?
In England and Wales, most flats are sold on a leasehold basis. You own the property for a fixed term — the length of the lease — after which ownership reverts to the freeholder (landlord). As the lease gets shorter, the value of your property falls. Mortgage lenders typically won't lend on properties with leases under 70 years, and many refuse below 85 years.
The critical threshold is 80 years. Once your lease drops below 80 years, something called "marriage value" kicks in. This is the uplift in value that arises from merging the leasehold and freehold interests — and the freeholder is legally entitled to 50% of it. This can dramatically increase the cost of your lease extension.
Your Legal Right to Extend
Under the Leasehold Reform Housing and Urban Development Act 1993, most leaseholders have a legal right to extend their lease by 90 years (added to the unexpired term) and to reduce their ground rent to zero. To qualify, you must:
- Have owned the flat for at least two years
- Hold a "long lease" (originally granted for more than 21 years)
- Not live in a property that is exempt under the Act
If you qualify, the freeholder cannot refuse — they must grant you a lease extension at a price determined by a specialist valuation process.
How the Lease Extension Premium Is Calculated
The premium (the price you pay to your freeholder for the extension) is calculated using a statutory formula based on three main components:
- Ground rent capitalisation: The value of future ground rents the freeholder will lose
- Reversion value: The value of regaining the flat in its current state at the end of the lease
- Marriage value (if applicable): 50% of the uplift in the property's value from extending, payable once the lease is below 80 years
This is where a specialist RICS lease extension surveyor is essential. The premium calculation is complex, and getting it wrong — even slightly — can cost thousands of pounds.
"I recently advised a leaseholder in Fulham whose lease had 76 years remaining. The freeholder's initial premium demand was £48,000. After our counter-valuation and negotiation, we agreed a premium of £29,500 — a saving of nearly £18,500."
The Informal vs Formal Route
There are two ways to extend a lease:
Informal Route
You approach the freeholder directly and negotiate a price without invoking the formal statutory process. This can be quicker and cheaper — but you're not protected by law if negotiations break down, and you may pay more than you need to if you don't have a proper valuation.
Formal Route (Section 42 Notice)
Your solicitor serves a Section 42 notice on the freeholder, starting the formal statutory process. The freeholder has two months to respond with a counter-notice. If you can't agree on a premium, either party can apply to the First-tier Tribunal (Property Chamber) to determine the price.
The formal route is slower but protects your rights and gives you access to tribunal proceedings if the freeholder is unreasonable.
The Role of a Lease Extension Surveyor
At every stage of the process — informal or formal — you need a specialist RICS surveyor to:
- Carry out an independent lease extension valuation
- Review the freeholder's valuation and challenge it if necessary
- Negotiate the premium with the freeholder's surveyor
- Act as your appointed surveyor in tribunal proceedings if required
Costs and Timescales
The total cost of a lease extension includes:
- The premium paid to the freeholder
- Your solicitor's fees (typically £1,500–£3,500)
- Your surveyor's fees (typically £1,000–£2,500)
- The freeholder's surveyor's fees (which you pay — typically £750–£2,000)
- Land Registry registration fees
Timescale: An informal route can complete in 3–6 months. The formal statutory route typically takes 6–12 months, or longer if the matter goes to tribunal.
Lease Extension FAQs
Can I sell my flat before extending the lease?
Yes — but it will be harder and you'll almost certainly get a lower price. Many buyers won't purchase leasehold properties with short leases, and those that do will negotiate hard on price. It's usually better to extend before selling.
Can I extend my lease informally with the freeholder without a surveyor?
Technically, yes — but we strongly advise against it. Without an independent valuation, you have no way of knowing whether the freeholder's asking price is reasonable. Our experience consistently shows that unrepresented leaseholders pay significantly more than those with proper surveying advice.
What is enfranchisement?
Collective enfranchisement is the right of leaseholders in a building to collectively purchase the freehold from the landlord. If you and at least half of the other leaseholders in your building qualify, you can buy the freehold — and then control ground rents, service charges, and future lease extensions.
The Bottom Line
If your lease is under 85 years — and especially if it's under 80 — you need to take action now. The longer you leave it, the more expensive the extension becomes. Start with an independent lease extension valuation from our team to understand what you'll realistically pay.
Contact Hammersmith Surveyors for lease extension advice across Hammersmith, Fulham, and West London.
Related reading: Our lease extension service · Probate valuations · Property valuations explained
