Buying a flat with a short lease

Linz Darlington | May 2022

You’ve found a flat you love. It’s bright, it’s airy, it’s close to your friends. And that kitchen!

But there's a snag. The estate agent has let slip that the flat has a short lease, with 90 years or fewer remaining.

Homehold don't currently do lease extensions for people buying flats. This is because this is something best done by the solicitor who you are using to purchase the flat, and we don't offer conveyancing services.

Our team doesn’t have capacity to offer advice on the phone to buyers of flats – but we’ve written a very detailed article to help the best we can.

The article below is designed to help you formulate a plan:

  • Step 1: Work out the current length of the lease
  • Step 2: Understand how the lease length affects the lease extension
  • Step 3: Review the options available to extend the lease
  • Step 4: Consider the pitfalls
  • Step 5: Review the FAQs

Before you read this article it is worth us pointing out that most buyers find that it is better to purchase a flat with a long lease than a short one.

Purchasing a flat with a short lease is rarely a good way to make money, but more importantly than that, it can be high-risk, stressful and be the cause of a lot of hassle. If you can find a suitable flat with a long lease, please consider whether this is a better option.

Step 1: Work out the current length of the lease

The estate agent will give you vague assurances about how long the lease is – but don’t rely on them. You need to know the exact length of the lease so you can be well informed.

Fortunately, this information is held on the Land Registry website and can be purchased for £3. The document you need is called the “Title Register”. This will tell you how long the lease originally was, and when it was leased from. You can work out how long it is now.

Step 2: Understand how the lease length affects the lease extension

Above 84 years

If the lease is currently above 84 years, then you are not in a bad position. You will probably be able to get a mortgage on the flat with its existing lease and this gives you options.

The lease is short enough that you do need a plan to extend it in the very near future – but all the options in “Step 3” are open.

80 to 84 years

The day a lease drops below 80 years it gets suddenly more expensive to extend – it is like a cliff edge.

As a result, if you are looking at purchasing a flat which has a lease close to this point you may need to get the seller to start the lease extension process. This means it is started in advance of this 80-year mark.

So long as a statutory lease extension is started before it drops below 80 years, it is the date the notice is received by the freeholder which the premium is based on. The important thing is that the document served on the freeholder (called a “Section 42 Notice”) is done so properly – because if it isn’t the lease extension won’t have been started.

In this case “Option A” is your safest bet, and “Option C” should be avoided.

70 to 79 years

While the lease is clearly shorter than if it was at the 80 to 84-year point, strangely it is a lower risk. This is because the lease is already below 80 years.

All the options in “Step 3” are likely to be open to you.

Fewer than 70 years

If you have fewer than 70 years remaining on your lease it is very likely that you won’t be able to get a mortgage on the flat. Unless you are a cash buyer, you will need to organise for the lease extension to be completed before you purchase it – which is “Option A” below.

Step 3: Review the options available to extend the lease

Option A) Complete the lease extension before you purchase

If you get the lease extension sorted before you purchase the flat it means when you get the keys, it will have a nice long lease and you won’t have to worry about it when you take over as the owner. In this case, you should expect to pay full price for the flat.

Tip: Understand how the lease extension will be funded

Lots of flat owners hold off doing lease extensions because they simply can’t fund them. If the seller hasn’t got the money to pay for the lease extension, there is a way that your solicitor can organise to extend the lease “on completion” of the purchase.

The way this works is that the lease extension will be provisionally agreed between your seller and the freeholder. On completion day your money is transferred from your solicitor to the seller’s solicitor. Some of the money is then transferred to the freeholder’s solicitor for the lease extension. Your solicitor will need to make sure that they’ve secured the required “undertakings” (which means legal promises) from the other solicitors to ensure the lease extension is completed as promised.

Tip: Avoid informal lease extensions

To speed up the process of getting a lease extension, often the current owner of the property will contact the freeholder informally. This can be a calamity – because your seller is interested in only two things (1) getting it sorted as quickly as possible and (2) keeping the premium as low as possible. This means that they may well accept terms in the new lease (including high ground rent) which are not favourable to you. Unless the lease extension is a statutory lease extension, you must get your solicitor to check the terms before you exchange contracts. Read more about the pitfalls of the informal route.

Pros: The benefit of this option is that it allows you to purchase the property with a nice long lease and you won’t have to worry about getting it extended once you move in.

Cons: A lease extension can take a long time to be fully completed and registered – so you’re likely to be waiting for your new flat for many months or even over a year.

Option B) Start the lease extension before you purchase

Option A is often not very attractive as it requires you to wait until the lease extension has been completed before you can move in – and this can be over a year.

The alternative is that you get the seller to start the lease extension, with a view that you will complete it.

You’re not eligible for a statutory lease extension until you have been the registered owner of the flat for two years and this is why you would want the seller to start the process.

The way this will work is that your seller will serve a section 42 notice on the freeholder and the benefit of this will be “assigned” to you on completion and registration of the property.

If you’re purchasing with a mortgage, this approach will generally only work if there are more than 70 years remaining on the current lease. Otherwise, you may not be able to borrow the money.

Tip: Take responsibility for the process

By the time the lease extension premium is agreed and the lease extension completed, your seller will be long gone.

For this reason, it is in your interest, not theirs, for the lease extension process to be implemented properly. Make sure your representatives are taking responsibility for ensuring that (1) the contract requires the seller to serve the notice between exchange and completion (2) the notice is validly served and (3) it is correctly assigned from the seller to you.

It is very important to get this process right, because otherwise you can lose the right to extend the lease until you’ve owned the property for two years. This can be a catastrophe if the lease is currently close to the 80-year mark.

Tip: Decide who is going to pay for it

There are two options for paying for a lease extension under “Option B”.

The first option is that you pay for the lease extension yourself. In this case you will want to negotiate a big discount for the flat on the basis that you’re purchasing it with a short-lease and taking on the risk and cost of paying for a lease extension.

You will need to ensure you’re holding back enough of your deposit that you are able to pay for the lease extension. Something to consider is that if you’re holding onto a chunk of your deposit, you’ll have less equity in your property when you purchase it. This means you may pay a higher mortgage rate and a bigger monthly mortgage payment.

The alternative is that you pay full price for the flat – as though it already has a long-lease. An agreed sum of money (known as a “retention”) from this purchase price is held by your solicitor and used to pay for the lease extension on completion. This sum of money should be sufficiently big that it can comfortably pay for the premium and fees and still have something left to cover unexpected costs. You need to ensure that if for any reason the lease extension falls through, this money is returned to you, not the seller.

Pros: You won’t have to wait ages to get the keys to your flat, or wait two years until you can extend the lease yourself.

Cons: You’re burdened with a lease extension as soon as you move into your property.

Option C) Wait until you’ve owned the flat for two years

Once you’ve owned the flat for two years, you have your own right to extend the lease. It is worth noting that this date is from the date at which you become the registered owner of the flat at the Land Registry and this is usually a few weeks to a few months after you get the keys.

Pro: The benefit of this approach is that you separate the lease extension and purchase of the property into two separate transactions – which makes it more manageable. It also can give you time to save up for the lease extension.

Cons: The cost of a lease extension doesn’t remain static overtime – it can be made cheaper or more expensive with the outcomes of tribunal or court cases.

Step 4: Consider the pitfalls

Before you embark on the lease extension, please consider the pitfalls below. We find these are common for people who are doing lease extensions having purchased the flat with a short lease.

Premium Negotiations:

You don’t know how much the premium will be until the lease extension has been completed. Estimates from calculators or even a formal valuation won’t necessarily be exactly what you will pay for your lease extension.

It is also worth noting that the cost of a lease extension is not a static thing – it can be affected by a number of things including decisions from the tribunal or court system. Particularly if you are waiting two years, the cost might be different in the future than what you think it will be now.

Marriage Value Trap:

When you extend a lease, the value of the flat is likely to jump up in value – to reflect the fact that it now has a long-lease. This is called Marriage Value.

If a lease has fewer than 80-years remaining, you must pay a share of this hypothetical profit to your freeholder.

If you have purchased a flat with a short-lease and negotiated a significant discount on the purchase price, the freeholder is likely to argue they need a higher premium. This means the calculators are likely to under-estimate the cost of the premium.

This creates a frustrating cycle: you need to negotiate a big discount to cover the cost of the lease extension, but the bigger discount you negotiate the bigger discount you need!


If you can’t agree a premium or costs with your freeholder, or they fail to play ball at all, you will need to make a tribunal or court application. You need to consider how to pay for this eventuality.


When you do a lease extension you have to pay your own legal and valuation costs and you also must pay your freeholder’s fees.

Homehold charge a fixed-fee of £2,175+VAT. A good rule of thumb is that your freeholder’s fees are likely to be much the same, but they can be much higher.


A freeholder does have to grant you a lease extension – but only if the process is started with a valid notice and then the timelines throughout the process are met. Make sure that your representatives are on top of things.


At Homehold, our lease extension specialists work very hard to make the lease extension process as stress-free and smooth as possible for our clients. Despite this, a lease extension can cause a lot of hassle. This is made even worse if it is entwined with the purchase of a property.

Ask yourself whether you want to sign up for a long and arduous process.


Why is buying a flat with a short lease and then extending it rarely a good way to make money?

Usually, the difference in price between the value of a flat with a short and a long-lease is not much greater than the sum of the premium and the legal and valuation fees. This is market forces at work!

Even if you get the flat for a steal, you can find yourself falling into the “Marriage Value Trap”.

Can you tell me how much my lease extension will cost?

Our lease extension calculator gives a good indication of how much you will pay for your lease extension – although this shouldn’t be considered valuation advice.

Short of doing a valuation your behalf, we’re unable to give you a better indication than this.

Remember, you won’t know what the premium and fees will be until these have been agreed with your freeholder – so make sure you have plenty of funds available to complete the deal.

Are there changes to the law which will make it cheaper to extend my lease?

The government has made promises which should make it cheaper for owners of flats with very short leases to extend them – but we don’t know when these changes will happen or exactly what they will look like.

If you’re a bit of a gambler, you could purchase a flat with a short lease now with the hope it will be cheaper to extend in the future. This is a decision only you can make.


Hopefully this article will have provided you with what you know to formulate a plan to extend the lease on your new flat – or the encouragement to walk away and find a flat with a long lease.

Particularly if you are taking on the lease extension process, or will be starting it in two years, make sure that your plan is bullet-proof. This really means making sure that when you come to extend your lease you have the funds to do so.

Good luck!

Start your lease extension today

Article author photo

Linz is the CEO and co-founder of Homehold. He’s always looking at how we can improve our service and better support you through the lease extension process. If you have any questions about your lease he’d be delighted to help.

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