Lease extension and buying the freehold

On 21 July 2020 the Law Commission published proposals to change the lease extension and enfranchisement process. Whilst this does not take effect yet and we have no information as to how these proposals will be implemented or law changed, we recommend that you review this page before proceeding with any application. If you’d like to discuss the proposals or the current legislation and Hyde’s approach, please do contact us

Eligibility for purchasing the freehold 

Only qualifying leaseholders can take part. A qualifying leaseholder requires a long lease, which is generally: 

  • A lease for a fixed term in excess of 21 years when first granted
  • The continuation of a long lease under the Local Government Housing Act 1989 following the expiry of the original term
  • A shared ownership lease where the leaseholder’s share is 100% 

Even if the leaseholder satisfies the above criteria, he or she will not be a qualifying leaseholder if any of the following cases apply:

  • The landlord is a charitable housing trust and the flat is provided as part of the charity’s functions
  • The leaseholder owns more than two flats in the building
  • The leaseholder has a business or commercial lease

The building:

  • There must be a minimum of two flats in the building
  • At least two-thirds of the flats must be leasehold
  • No more than 25% of the internal floor area to be in non-residential use 

Lease extension

As your lease term decreases, there are associated negative implications that you should be aware of. This can include difficulties in selling or re-mortgaging as well as the decreasing value of the property itself.

However, as a leaseholder or shared owner, you may have the opportunity to add a further 90 years to the existing term of your lease. This is known as a lease extension. A premium will be payable to Hyde to do this.

The potential benefits of extending your lease now include the following.

Easier to re-mortgage

Mortgage lenders are more willing to lend on longer lease terms. Where there are less than 80 years remaining, it may be deemed that there is inadequate security for a loan.

Easier to sell

A short lease term is likely to make the property less attractive to potential buyers.

The value of your home is protected

The value of the property would fall when the remaining lease term is low as the assist is diminished. 

Premium payable will increase over time

The increase in premium is two-fold:

  • In general terms, the greater number of years left on the lease, the cheaper the amount payable to extend it.
  • As house prices rise in the future, the premium rate would subsequently increase as well 

No more ground rent charge

Once the extension is complete, the annual ground rent charge will revert to £0.00 for the remainder of the term.

Frequently asked questions about lease extension

  • What is the criteria and am I eligible?

    An application can be made either through the statutory route or the voluntary route (depending on circumstances). The difference between the two is:

    Statutory lease extensions

    You must be both:

    • 100% leaseholder and
    • The owner of the property for at least two years

    Voluntary lease extensions

    You can be either:

    • 100% leaseholder who has owned the property for less than two years or
    • A shared owner

    For either route, the following conditions must also be met:

    • There must be an initial lease term of over 21 years
    • No existing breaches of lease
    • All conditions under the head-lease can be met (i.e. where Hyde are not the freeholder)
  • What factors affect the premium?

    Value of property

    Hyde will instruct an independent valuer to provide us with a valuation of the property.

    Remaining term of lease

    The shorter the term remaining, the higher the premium is likely to be. This is particularly significant in the final 80 years due to the ‘marriage value’ (see below).

    Marriage value

    The ‘marriage value’ charges you for the increase in property value caused by extending the lease.

    For leases with less than 80 years left to run, the premium for extending the lease will include 50% of the marriage value. For leases with more than 80 years left to run, the marriage value is taken to be £0.

    Potential loss of ground rent

    Following the lease extension, the ground rent will revert to £0.00. The premium would therefore reflect any future loss of rental income to Hyde.


  • What fees/costs would I be liable for?





    As per agreed valuation

    As per Hyde valuation

    Hyde administration fee



    Hyde solicitors fee



    Hyde valuation fee



    Your solicitor fee

    Resident to arrange

    Resident to arrange

    Your valuation fee

    Resident to arrange


    Stamp duty*

    Dependent on value of extension

    Dependent on value of extension

    All stated costs include VAT (20%).

    *Stamp duty is only applicable where premium exceeds £125,000.

  • Who should I contact to discuss this further?

    To discuss further, you can contact Hyde’s Home Ownership Team:

    • Freephone: 0800 328 2282
    • Email: [email protected]
    • Post: The Hyde Group, The Home Ownership Team, 30 Park Street, London, SE1 9EQ.
  • How can I obtain independent advice?
    • You can obtain independent legal advice from the Citizens Advice Bureau, a housing advice centre or a firm of solicitors.
    • The Leasehold Advisory Service is an independent, government backed organisation that can provide further information on lease extensions and other matters. You will also be able to get an indication of the premium payable by using their lease extension calculator. Their website can be found at
  • Guides to lease extension
  • How do I apply for a voluntary lease extension?
  • How do I apply for a statutory lease extension?

    To apply for a statutory lease extension you will need to contact a solicitor who will advise you on the process and provide you with the relevant documents for your application.