Residential lease extension

What does a lease extension mean?

When you purchased your property, you became a leaseholder. Being a leaseholder means that you have a lease from ñNTR, who is either the freeholder or owns the headlease. The housing association is your landlord.

The lease is a contract granting use of the property for a number of years. Your leasehold term is for a set amount of time, which is typically 99 or 125 years but can range anywhere up to 999 years. At the end of this term the property will revert to the housing association who is the freeholder. A lease extension is therefore a continuation of a lease beyond its original term.

ñNTR is a charity whose properties are used for the benefit of its charitable purposes. Therefore, leaseholders are exempt from the statutory right to extend their lease under Leasehold Reform ñNTR and Urban Developments Act 1993 “the 1993 Act”. Shared owners are also exempt from the statutory right to extend their lease.

However, ñNTR understands that a leasehold property loses value the shorter a lease term gets and concurrently the cost of extending your lease also increases the shorter the term gets. When a lease term falls below 80 years it is generally considered as ‘short’. Short leases can make it difficult for the leaseholder to sell their home or re-mortgage, as mortgage providers consider it an increased risk against lending on a short lease.

ñNTR hastherefore adopted a voluntary process to allow our lease holders to apply to us to extend their lease.

The benefitof extending your lease

As your lease gets shorter, the value of the lease decreases and in turn can affect the value of your home. It may also cause issues when you re-mortgage, as lenders are often reluctant to lend on a lease with less than 80 years left on it. The same issue will arise for purchasers, if you are trying to sell your home. It is likely that it will make your leasehold property easier to sell as it will be open to a wider market of buyers.

By extending the term of your lease, lenders are likely to be more willing to agree a mortgage on your property, and your home will also be more desirable to a wider number of purchasers. Extending the term of your lease may also increase the value of your leasehold property.

A lease extension may provide you with more security – if you allow your lease to run down and expire,you will be allowing the lease and the property to revert to us as the freeholder upon the date of expiry. This will mean that you have no longer have a lease and therefore no legal right to occupy the property.

Subject to the agreement of the premium and an undertaking to pay the fixed legal and administration costs, in principle we would be willing to extend the lease of your property under our voluntary process on the same terms as those you would be entitled to under the 1993 Act. This means the grant of a new lease for a term of 90 years on top of the remaining term of your existing lease. The ground rent provisions within your lease will be reduced to a peppercorn rate. For shared owners the provisions relating to payment of specified rent, the rent paid on the share owned by the landlord, will continue on the terms set out in your agreed lease.

Please note: if your landlord is not the freeholder of the property in which you live, we are not able to extend your leasehold term beyond the length of the leasehold term that we own in our headlease.

What costs are involved for you?

All costs correct at time of publication

FeeCostTime period when fee is collected
The valuation fee£850 + VAT


Payable in advance – we will instruct the valuer
The housing association’s legal fees and disbursements


£950 + VATPayable upon completion or withdrawal of the process
The housing association’s administration fee£250Payable upon completion or withdrawal of the process
PremiumThe premium you will pay will be determined by the appointed RICS Surveyor and will be calculated using the standard formula provided under the Leasehold Reform ñNTR and Urban Developments Act 1993Payable upon completion
Lender fee (if applicable)Variable (see below)Cost of obtaining a Consent to Deal


To be transparent as possible and provide our leaseholders with as much information as we can, to enable you to make an informed decision, we have negotiated fixed legal and valuation fees with our surveyors and solicitors.

Therefore, the only variable cost is the premium payable for the lease extension and any Consent to Deal fee charged by the Group’s mortgagee (if any).

The premium is determined by an independent specialist Chartered Surveyor using the standard formula methods set out under the 1993 Act. The premium is designed to compensate the housing association landlord for the loss of ground rent and the fact that the right to get the flat back at the end of the term is postponed by 90 years. In addition, the housing association may be entitled to half of the “marriage value”.The marriage value is basically the increase in value as a result of the extension.No marriage value is payable where there is over 80 years left on the term of the lease.

The government sponsored website atcontains a very good plain English guide to how the lease premium is calculated. There is also a calculator on this site you can use to obtain a rough idea of what the premium and marriage value (if applicable) is likely to be.

Other costs you may incur:

Your mortgage provider’s FeeIf applicable:

These costs are not payable to the landlord, but you will need to consider them and take financial and/or legal advice if required.


Land registration fee
Change of any terms
Your solicitor fees


Leaseholders and their advisors need to understand from the outset that an application to extend a lease usually takes between 8-12 weeks.However, this can be shorter or longer and leaseholders need to allow for this.It is often the case that leaseholders are in the process of selling or re-mortgaging their leasehold properties where time is of the essence.

While all efforts will be made to take into account individual circumstances, no guarantees or assurances can be provided in relation to timing and therefore you will need to consider the effect this may have on the re-mortgage or the sale of your leasehold property.

Independent legal advice

We recommend seeking your own independent legal advice before deciding to proceed with a lease extension.

The advice should cover the legal, valuation and financial aspects of the proposed lease extension. You must make sure you have sufficient information and advice to decide whether a lease extension is the correct route for you.

For shared ownership leases, the need to extend a lease for saleability and mortgage requirements always needs to be balanced against the issue of whether it is better to staircase up. It is important to understand that extending the lease can, depending on the market at the time, increase the value of the property. This means that staircasing in the future could be more expensive. You also should consider the possible effect on rent increases after staircasing.

What now?

To start your request to be considered for a lease extension you will need to complete and return our lease extension application form. Please emailleasehold@housingplusgroup.co.ukto request a copy. You will need to have a clear service charge and/or major works account or be on, and kept to, an agreed repayment plan in order to proceed.

We will contact you to discuss your application and advise how you make the payment for the Surveyor’s Valuation Fee. The valuation fee is non-refundable should you decide not to go ahead with the lease extension.

Once we receive the surveyor’s valuation, we will write to you setting out the terms on which we will offer to extend your lease. We will also advise you of the premium you will need to pay to us upon completion of the lease extension. If you agree to the terms, you will need to pay our administration fee. The administration fee is non-refundable, whether or not the lease extension proceeds to completion.

Once we receive the Surveyor’s Valuation, we will write to you setting out the terms on which we will offer to extend your lease. We will also advise you of the Premium you will need to pay to us upon completion of the Lease extension. If you agree to the terms, you will need to pay our administration fee. The administration fee is non-refundable, whether or not the lease extension proceeds to completion.

Once you have agreed to the terms, we will instruct our solicitors to draw up a draft lease and you will also need to instruct your own solicitor to act for you. You will have to pay the other costs outlined above plus VAT and disbursements on completion of the transaction. Again, should you decide not to proceed you will still be liable for our solicitor’s fees for the work already undertaken.

If you have any rent or service charge arrears these must be cleared before completion of the extension of the lease.

The extension of the lease will be registered with the Land Registry by your solicitor.

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