Landlord Leasehold Enfranchisement UK 2026 — Rights and Process

Statutory lease extension — key rights

A qualifying leaseholder has the right to extend their lease by statute, on terms set by legislation:

• Previous rules (1993 Act): leaseholders needed to have owned the property for 2 years before qualifying for a statutory lease extension. Under the LRFA 2024, this two-year ownership qualification is removed — you can exercise the right from the day you complete purchase
• Extension term: under the 1993 Act, statutory extensions added 90 years to the unexpired term. LRFA 2024 increases this to 990 years, bringing English and Welsh leasehold closer to virtual freehold
• Ground rent: the extended lease replaces existing ground rent with a peppercorn (zero) for the entire extended term, resolving ground rent issues at the same time as the extension
• Premium payable: the leaseholder pays a premium to the freeholder for the extension. The premium is calculated by a statutory formula based on the ground rent capitalisation value, the deferment value of the freehold reversion, and 'marriage value' (where the unexpired term is below 80 years, 50% of the 'marriage value' — the additional value created by merging lease and reversion — is added to the premium)
• LRFA 2024 premium reforms: the Act aims to reduce extension premiums by reforming the valuation rates used in the premium calculation. The new rates (not yet in force, awaiting secondary legislation) are expected to reduce premiums for many leaseholders
• Freeholder cannot refuse: the freeholder cannot refuse a valid statutory notice. They can only negotiate the premium and terms. If agreement is not reached, the First-tier Tribunal (Property Chamber) determines the premium

Collective enfranchisement — buying the freehold

Collective enfranchisement allows a group of leaseholders to jointly purchase the freehold of their building:

• Qualifying conditions: at least 50% of qualifying leaseholders in the building must participate. The building must be a self-contained block or part of a block. At least two-thirds of flats must be held on long leases. No more than 25% of the building's floor area can be in non-residential use
• LRFA 2024 changes: the Act increases participation thresholds and simplifies the process. Some provisions (including changes to the 25% non-residential limit) are not yet in force — check current implementation status
• Right of First Refusal (RFR): separate from collective enfranchisement, the Landlord and Tenant Act 1987 gives qualifying tenants a right of first refusal if the freeholder proposes to sell the freehold. Failure to comply is a criminal offence. If you are organising collective enfranchisement and the freeholder has previously sold without offering RFR, you may have grounds to purchase at the historic price
• Nominee purchaser: leaseholders nominate a company (typically a Resident Management Company they incorporate) to hold the freehold on their behalf. Participation agreements between leaseholders set out the terms of freehold ownership and future management
• Premium: similar valuation methodology to lease extensions. The freeholder receives a premium based on the investment value of the ground rents, the deferment value of the reversion, and marriage value (where applicable)
• Post-enfranchisement: once you own the freehold collectively, you control service charges, management costs, building insurance, and can grant lease extensions to yourselves at a nominal premium — significantly improving the capital value of each flat

Process and timescales for statutory lease extension

The statutory process follows a prescribed notice procedure:

• Step 1 — Instruct a specialist solicitor: leasehold enfranchisement is a specialist area. Instruct a solicitor who is a member of the Association of Leasehold Enfranchisement Practitioners (ALEP). Do not use a general property solicitor unfamiliar with the statutory valuation process
• Step 2 — Obtain a valuation: commission a RICS-registered leasehold valuer to assess the likely premium before serving notice. You do not want to serve notice and then discover the premium is unaffordable
• Step 3 — Serve the initial notice (Section 42 notice): your solicitor serves the formal notice on the freeholder specifying the proposed terms and premium. The freeholder has 2 months to serve a counter-notice
• Step 4 — Counter-notice and negotiation: the freeholder's counter-notice sets out their counter-premium. Most cases settle in negotiation — typically within 3–6 months of the initial notice
• Step 5 — Tribunal if no agreement: if no agreement is reached within 6 months of the counter-notice, either party can refer the matter to the First-tier Tribunal. The Tribunal determines the premium
• Step 6 — Completion: the new extended lease is completed and registered at the Land Registry. SDLT may be payable depending on the terms

Costs of leasehold enfranchisement

Allow for the following costs when planning a lease extension or collective enfranchisement:

• Premium: the main cost, determined by statutory valuation. For a property with a lease over 80 years, the premium is typically modest (often £5,000–£20,000 for a standard flat). For leases below 80 years, marriage value adds significant cost — below 70 years the premium escalates rapidly
• Your solicitor fees: typically £1,500–£3,000 for a straightforward statutory extension, more for contested matters or collective enfranchisement
• Freeholder's solicitor and valuer fees: you must pay the freeholder's reasonable legal and valuation costs in connection with the statutory notice process (this is a statutory obligation). Budget £1,500–£3,000 for straightforward cases
• Your valuer fees: RICS valuer for the initial premium assessment and any Tribunal proceedings — typically £800–£2,000
• SDLT: a lease extension premium over £250,000 (or £125,000 if paying the new residential SDLT rates) triggers Stamp Duty. In most cases the premium is below these thresholds but check with your solicitor
• Land Registry registration: registration fee for the new lease — typically £95–£540 depending on the premium value

When to act — the 80-year threshold

The lease length critically affects enfranchisement cost due to 'marriage value':

• If your lease has more than 80 years remaining: marriage value does not apply and the extension premium is calculated purely on ground rent capitalisation and reversion deferment — typically much lower
• If your lease falls below 80 years: 50% of the marriage value (the additional value created by combining lease and freehold) is added to the premium. This can double or triple the extension cost compared to the same property at 85 years
• The 80-year 'cliff': a property with 81 years remaining on the lease can be extended for (say) £8,000. The same property with 79 years remaining might cost £25,000+ to extend. The drop from 81 to 80 years triggers marriage value
• Act early: if your lease is approaching 85 years, take specialist advice now. Factor extension costs into your purchase price if buying a property below 90 years. Extending before the property drops below 80 years saves significant money
• Mortgage lenders: most lenders require the lease to have at least 70–85 years remaining at the end of the mortgage term. A lease that falls below lender minimum requirements mid-mortgage can trigger early redemption clauses. Check your lender's minimum requirements

Frequently asked questions