10 Costly Mistakes to Avoid When Extending Your Lease

Avoid these 10 expensive mistakes that leaseholders make when extending their lease, from using general solicitors to waiting too long and accepting the freeholder's first offer.

10 Mistakes That Cost Leaseholders Thousands

Mistake 1: Waiting Too Long

The single most common and expensive mistake. Every year below 80 years adds marriage value and reduces mortgageability. Leaseholders who dismiss the issue until they are trying to sell often face a shock — or cannot sell at all.

Mistake 2: Using a General Solicitor

Leasehold enfranchisement is highly specialist. A general property solicitor will charge similar fees but produce inferior results, miss procedural deadlines, and fail to spot issues a specialist would catch immediately. Always use a firm where enfranchisement is a significant part of their practice.

Mistake 3: Not Getting Surveyor Advice First

Many leaseholders instruct a solicitor first and a surveyor second. The correct order is reversed: instruct a surveyor to advise on the likely premium before committing to the statutory process. This ensures your Section 42 notice contains a realistic opening offer.

Mistake 4: Serving the Notice Yourself

An invalid notice — missing required information, served on the wrong party, or incorrectly timed — can be treated as withdrawn, wasting costs and alerting the freeholder prematurely. Never serve a Section 42 notice without specialist legal advice.

Mistake 5: Not Checking for Absent Freeholders

Where the freeholder cannot be found, special court procedures are needed. Check the Land Registry for the freeholder's registered details before instructing anyone.

Mistake 6: Accepting the Freeholder's First Offer

Freeholders routinely open negotiations well above the RICS-calculated figure. Studies suggest initial freeholder demands exceed eventual Tribunal awards by 35–50% on average. Always have your own surveyor's valuation before negotiating.

The majority of lease extension premiums settle at 60–75% of the freeholder's initial counter-notice figure following professional surveyor negotiation.

Mistake 7: Underbudgeting

The premium is just one cost. Failing to budget for all professional fees means you may be unable to proceed — which has its own legal and financial consequences.

Mistake 8: Ignoring the Qualifying Period

Under current rules (before the 2024 Act is fully in force), you must have owned the property for two years. Check whether the relevant 2024 Act provision is in force before assuming you can extend immediately after purchase.

Mistake 9: Assuming Informal Is Cheaper

Informal (non-statutory) extensions give you no statutory protection. The freeholder can withdraw at any time, set their own terms, and may include unfavourable new covenants including escalating ground rents. Many leaseholders who went informal ended up paying above-market premiums.

Mistake 10: Not Reading Your Existing Lease

Your current lease may contain unusual clauses relevant to the extension. Knowing what you have helps ensure the new lease properly addresses any issues in the existing document.