Can a freeholder refuse to extend a lease?

The value of a leasehold property is affected by how many years are left on the lease.  The shorter the remaining time, the less valuable it becomes and the more expensive it is to extend your lease. If you own, or are considering buying a leasehold property, understanding your right to extend your lease is essential to protect the value of your investment.

Does the freeholder legally have to grant you a lease extension?

Niki Adkins is an Associate and the Lease Extension Specialist at Frettens with many years’ experience in this niche area of law. Niki advises that “This depends on how long you have owned the property. If you have held the lease for two years or more, you will have a statutory right to extend the lease under the Leasehold Reform Housing & Urban Development Act 1993. This will entitle you to an additional 90 years on top of your existing term and your ground rent will be reduced to a peppercorn rate (zero). It is worth noting that the Freeholder cannot withdraw from a Statutory procedure.

For leaseholders with less than two years ownership it may be possible to negotiate a lease extension with the Freeholder, this is called an Informal lease extension. The terms of the extension in respect of number of years and the ground rent are variable. The Freeholder can withdraw at any time.”

Can the freeholder refuse?

In a nutshell ‘No’ in respect of the Statutory process (as long as it is followed correctly) and ‘Yes’ in respect of an Informal request. Accordingly, the Statutory route is more preferable as the Freeholder cannot back out.

When is the right time to extend the lease?

The earlier the better but most importantly before the critical 80 year mark as additional compensation will be due to the Freeholder, known as the ‘Marriage Value’. The cost of your lease extension will increase sharply at 80 years and lower.

How much will it cost to extend my lease?

We can provide estimates of our costs. There are other fees to take into account such as the Freeholder’s legal and valuation fees, your valuation fees, Land Registry fees and the cost of the lease extension itself. In order to establish the premium payable to the Freeholder for the extension, you would need specialist valuation advice, which we can organise.

How long does it take to extend a lease?

A Statutory lease extension can take between 6 – 9 months and an Informal 6 – 10 weeks.

Leases are more likely to allow under- or sub-letting of part of premises (with consent) if they can be easily sub-divided, such as an individual floor forming part of a larger office block.

If a business is being sold as a going concern which includes the lease of premises then the landlord’s consent to the transfer will still be required.

Can you buy the freehold of a leasehold property?

It is possible for a majority group of leaseholders to purchase the freehold of the building by a process known as ‘Enfranchisement’. If the Freeholder offers the building for sale to the leaseholders this is known as the ‘Right of First Refusal’. We can offer our advice and legal services for both these procedures – please contact us for further advice.


Our Lease Extension Team are happy to discuss any issues that this raises for you and we offer a free initial meeting or chat on the phone.

If you have any questions, you only have to ask us at Frettens. Please call 01202 499255 or 01425 610100 and Niki or a member of the team will be happy to chat about your situation and your particular requirements.