If you’re buying or selling a leasehold property, one of the most important and often misunderstood factors is the length of the lease.
Whether you’re a first-time buyer considering a flat or a homeowner planning to sell, understanding lease extensions is essential. It can directly impact property value, mortgage eligibility, and how easy a property is to sell.
At S J Smith Estate Agents, we regularly advise clients across Surrey, including Ashford and Staines, on leasehold properties and when a lease extension becomes necessary.
In this guide, we explain what a lease extension is, when it matters, and why it can make a significant difference to your property’s value.
What Is a Lease Extension?
A leasehold property gives you the right to live in a property for a set number of years, rather than owning the land outright.
A lease extension is the process of increasing the length of that lease, typically by adding additional years to the remaining term.
In most cases in the UK:
- Leaseholders have the legal right to extend their lease
- A statutory lease extension usually adds 90 years to the existing term
- Ground rent is often reduced to zero (in many cases under current legislation)
This process involves negotiating with the freeholder and instructing solicitors and valuers.
Why Lease Length Matters
The length of a lease has a direct impact on a property’s:
- Market value
- Mortgage eligibility
- Buyer demand
As the lease gets shorter, the property becomes less attractive to buyers and lenders.
The 80-Year Rule
One of the most important thresholds to understand is 80 years remaining on the lease.
- Above 80 years: Lease extensions are generally more affordable
- Below 80 years: The cost of extending increases significantly due to “marriage value”
- Below 70 years: Many lenders become reluctant to offer mortgages
Because of this, properties with shorter leases can be harder to sell and may achieve lower prices.
When Should You Extend Your Lease?
1. Before It Drops Below 80 Years
Ideally, homeowners should consider extending their lease before it reaches 80 years remaining.
Extending earlier can:
- Save money
- Protect property value
- Avoid complications during a future sale
2. When You Plan to Sell
If you’re thinking about selling a leasehold property, a short lease can limit your pool of buyers.
Many buyers:
- Cannot secure a mortgage on short leases
- Are put off by the cost and complexity of extending
Extending the lease before marketing your property can make it more attractive and easier to sell.
3. When You Want to Remortgage
Lenders often have minimum lease requirements. If your lease is too short:
- You may struggle to remortgage
- Your lender options may be limited
- Interest rates could be less favourable
Extending your lease can open up better mortgage deals.
How Much Does a Lease Extension Cost?
The cost of extending a lease depends on several factors:
- Remaining lease length
- Property value
- Ground rent
- Freeholder’s terms
As a general guide:
- The shorter the lease, the higher the cost
- Costs increase significantly once the lease drops below 80 years
In addition to the premium paid to the freeholder, you’ll also need to budget for:
- Legal fees
- Valuation fees
- Administrative costs
Because of this, early action is often the most cost-effective approach.
Lease Extensions and Property Value
A longer lease can significantly increase a property’s value.
Properties with:
- Long leases (100+ years) are often treated similarly to freehold homes
- Short leases may be discounted by buyers
For sellers, extending a lease can:
- Improve marketability
- Increase buyer confidence
- Help achieve a stronger sale price
For buyers, purchasing a property with a short lease may offer negotiation opportunities but it’s essential to factor in the cost of extending.
Leasehold vs Freehold: Why It Matters
Understanding lease extensions also highlights the difference between:
- Leasehold: You own the property for a set period
- Freehold: You own the property and the land indefinitely
While leasehold properties are common for flats, buyers should always:
- Check the remaining lease length
- Understand ground rent and service charges
- Consider future extension costs
What Buyers Should Look Out For
If you’re buying a leasehold property, make sure to:
- Check the number of years remaining on the lease
- Ask whether the seller has started the extension process
- Understand the cost of extending in the future
- Factor lease length into your offer
A property with a short lease isn’t necessarily a bad investment but it requires careful planning.
What Sellers Should Consider
If you’re selling a leasehold property:
- Review your lease length before going to market
- Consider extending if it’s approaching 80 years
- Be transparent with buyers about lease details
- Work with an experienced agent to position your property correctly
At S J Smith Estate Agents, we guide sellers through these decisions, helping maximise value and minimise delays.
The Process of Extending a Lease
While every case is different, the typical process includes:
- Instructing a solicitor and surveyor
- Valuing the lease extension cost
- Serving notice to the freeholder
- Negotiating terms
- Completing legal documentation
The process can take several months, so it’s important to plan ahead.
Final Thoughts
Lease extensions may not always be top of mind when buying or selling a property, but they play a crucial role in value, mortgageability, and long-term investment.
In 2026, with buyers becoming more informed, lease length is under greater scrutiny than ever.
Whether you’re purchasing your first flat or preparing to sell, understanding when and why a lease extension matters can save you time, money, and stress.
At S J Smith Estate Agents, we provide clear, expert advice on leasehold properties across Surrey, helping you make confident, informed decisions.
Get in touch with our team here to discuss your property and lease options.