Mistakes to Avoid
8 Lease Extension Mistakes to Avoid When Selling a Flat
A short lease can shrink your buyer pool and your sale price. But extending a lease can be a long and complex process. How to choose the right route when you come to sell.
Why Lease Length Drives a Flat Sale
A short lease is one of the few things that can quietly knock thousands off your sale price or shrink your buyer pool to cash only. The lease term is the number of years left before the flat reverts to the freeholder, and the closer it gets to 80 years, the more it starts to matter: under that line an extra cost called marriage value comes into play, and below roughly 70 years the choice of mortgage lender starts to narrow. Our guide on mortgage lenders and lease length sets out where those lines fall.
The trouble is that a lease extension and a sale pull on the same clock, and the decisions you make about one shape the other. Extend at the wrong moment, pick the wrong route or leave it too late, and you can spend money you did not need to, or lose weeks you did not have. For the mechanics of the two routes themselves, our guide to statutory versus informal lease extension covers the detail.
This guide is written for England and Wales. It runs through the eight mistakes that catch flat sellers out most often, from letting the lease run too short to signing up to the first deal offered, and how to stay ahead of each one.
Mistake 1
Letting the Lease Slip Under 80 Years
The 80-year mark is the one that costs real money. Once the remaining term drops below it, the premium jumps because of marriage value: broadly, the freeholder becomes entitled to a share (currently 50 percent) of the increase in value that extending creates, and that share is added into the premium you pay. A lease at 81 years and one at 79 can differ by thousands of pounds for that reason alone. If your lease is anywhere near 80 years and you are thinking of selling, the time to deal with it is before it crosses the line, not after.
Mistake 2
Assuming You Must Always Extend Before Selling
Extending is not the only option, and it is not always the right one. If the lease is long enough that a buyer can mortgage it comfortably, you may not need to do anything. If it is short and you would rather not take on the cost and the wait, you can price the shortfall in and sell as is, or sell to a cash buyer who will handle the extension themselves. The mistake is treating a lease extension as a necessity. Weigh the premium and the fees against the price uplift and the buyers you would reach either way. Our guide on the mistakes to avoid when selling a short-lease flat looks at this choice in more depth.
Mistake 3
Taking the Informal Route Without Weighing the Trade-Offs
A freeholder may offer to extend your lease "informally", by private agreement, instead of through the statutory process. It can be quicker and cheaper, but it is entirely voluntary, so the freeholder sets the terms. Watch for two things in particular: a shorter extension than the statutory 90 years, and a ground rent kept in or increased rather than reduced to a peppercorn (a nominal zero). A retained ground rent can put off the buyer's lender later, which defeats the point. An informal deal can be the right call, but read what is actually on offer rather than assuming it matches the statutory terms.
Mistake 4
Accepting the Freeholder's First Figure
The premium is negotiable, and the freeholder's opening number is rarely the fair one. Get a valuation from a surveyor who specialises in lease extensions before you agree anything: it gives you a realistic range and a basis to negotiate from. Going in without one is how sellers overpay. The cost of a proper valuation is small against the size of the premium it helps you settle.
Mistake 5
Not Serving a Statutory Notice You Can Pass to Your Buyer
Here is the move many sellers miss. Under the statutory route you serve a formal notice (a Section 42 notice) to start the process. You no longer have to have owned the flat for two years before doing so, a rule that was scrapped at the start of 2025, so a buyer can begin straight after completion. Better still, you can serve the notice yourself and then assign its benefit to your buyer when you sell, which hands them a head start and makes a short-lease flat far easier to sell. The notice is assigned to your buyer as part of completion; if the lease is transferred without it, the notice is treated as withdrawn, so both solicitors need to handle it together. An informal extension cannot be passed on like this. Our guide to statutory versus informal lease extension explains how the notice works.
Mistake 6
Underestimating a Missing or Unresponsive Freeholder
If your freeholder is hard to reach, slow to respond or cannot be traced at all, the extension does not become impossible, but it does take longer. Where a freeholder will not engage, the statutory route still works through an application to the tribunal or court, and a missing freeholder can be dealt with by a vesting order that lets the extension go ahead without them. Both add time, so the mistake is leaving it until a buyer is waiting. If you suspect the freeholder will be a problem, start early.
Mistake 7
Banking on Leasehold Reform to Cut the Cost
The Leasehold and Freehold Reform Act 2024 promises to remove marriage value and change how premiums are calculated, which would make many extensions cheaper. It is tempting to hold off and wait for that. The catch is that these particular changes are not yet in force: the detailed rules still need further legislation, and the realistic timing is late 2026 at the very earliest, quite possibly later. Freeholders challenged the reforms in court and lost, but that does not bring the changes into force any sooner. Plan around the law as it stands today, not the law as it may become, especially if you want to sell in the meantime. Our guide to leasehold reform tracks what is in force and what is still on the shelf.
Mistake 8
Going It Alone, or Starting Too Late
A lease extension is a legal and valuation exercise with real money riding on getting it right, and it runs on its own timetable that does not always match your sale. Use a solicitor and a surveyor who do lease extensions regularly, and start early enough that the extension is not jeopardising your sale. Leaving it to the last minute is what turns a manageable job into a stalled sale.
Getting the Timing Right
The thread running through all eight mistakes is timing and control. A lease loses value as it shortens, the cost of extending it jumps once it falls under 80 years, and the extension can take longer than a typical sale. Sort the lease out on your own terms and your own timetable, get a proper valuation before you agree a premium, and where time is tight, serve a statutory notice you can pass to your buyer. The sellers who run into trouble are usually the ones who left it too late or signed up to the first deal offered.
None of this means a short lease leaves you stuck. A flat with a short lease still sells; it just reaches a smaller pool of buyers, and many of those are cash buyers who are happy to take the extension on themselves. If you would rather not extend at all, selling as is to a cash buyer is a perfectly valid route, and short-lease flats are the kind of property Sell Flat UK buys regularly. It is always worth weighing a straightforward sale against the time and cost of extending first.
Further Reading
Two related guides go further: how the two extension routes compare in practice, and the mistakes to avoid when selling a flat whose lease is already short.
Frequently Asked Questions
There is no hard cut-off, but the buyer pool narrows as the term falls. Most lenders are comfortable above about 80 to 85 years; below 80 the cost of extending rises because of marriage value; below around 70 fewer lenders will lend, and below about 60 you are largely into cash-buyer territory. A flat with a short lease can still be sold, it just reaches fewer buyers and usually at a lower price. Our guide on mortgage lenders and lease length sets out the thresholds.
It depends on the term left and your appetite for the cost and the wait. If the lease is long enough to mortgage comfortably, you may not need to do anything. If it is short, extending first can widen your buyer pool and lift the price, but it ties up money and time. A middle option is to serve a statutory notice and assign it to your buyer on completion, which gives them a head start without you finishing the extension yourself.
Yes, if you use the statutory route. You serve a Section 42 notice, then assign its benefit to your buyer by a deed of assignment that completes at the same moment as the sale. Done properly, the buyer carries on the claim you started, which makes a short-lease flat much easier to sell. The timing has to be exact: if the assignment is not completed alongside the sale, the notice can be lost, so both solicitors need to handle it carefully. An informal extension cannot be passed on this way.
Possibly, eventually, but not on a timetable you can rely on. The Leasehold and Freehold Reform Act 2024 is set to remove marriage value and change how premiums are worked out, which would make many extensions cheaper. Those particular changes are not yet in force, as the detailed rules still need further legislation, and the realistic timing is late 2026 at the very earliest, quite possibly later. Freeholders challenged the reforms in court and lost, but that did not bring them into effect. If you want to sell soon, plan around the law as it stands today.
It varies a lot, so treat any figure as a rough guide rather than a quote. The premium depends on the length left, the value of the flat and the ground rent, and rises sharply once the lease drops below 80 years. On top of the premium you pay your own legal and valuation fees and, on the statutory route, the freeholder's reasonable costs too. The single most useful step is a valuation from a surveyor who specialises in lease extensions before you agree anything. This is general information, not advice on your particular flat.
Each has its place. The statutory route gives you a fixed framework: a 90-year extension on top of the current term, the ground rent cut to a peppercorn, and a notice you can assign to your buyer. The informal route can be quicker and cheaper but is entirely at the freeholder's discretion, so watch for a shorter extension or a ground rent kept in, which can put off a buyer's lender. If a sale is the goal, the statutory route's assignability often makes it the stronger option.
A missing or untraceable freeholder does not block an extension, but it adds time. The statutory route has a procedure for absent freeholders: you apply to the court for a vesting order that lets the extension go ahead without them, with the premium paid to the court. It is more involved than a standard extension, so the mistake is leaving it until a buyer is waiting. If you suspect the freeholder will be hard to reach, start early.
A statutory extension commonly takes six to twelve months from serving the notice to completing, and can run longer if the premium is disputed and the case goes to the tribunal. A sale can move faster than that, which is why the two often collide. Starting early, or serving a notice you can assign to your buyer, keeps the extension from holding the sale up.