What Happens When a Leasehold Expires?

Leasehold dwellings are more common than many people think. Did you know that in 2024-25, there were an estimated 4.90 million leasehold dwellings in England, according to the UK Government. That’s about 20% of all properties in the country. Of these, about 69% were flats and 31% were houses, which isn’t surprising as they’re the most common set-up for this kind of arrangement.

An expiring leasehold can create uncertainty for homeowners, buyers and landlords. Questions about ownership rights, property value, and mortgage eligibility often become more urgent as the remaining lease term shortens.

In simple terms, when a leasehold expires, ownership of the property usually reverts to the freeholder unless the lease has been extended beforehand. While many leases still have decades remaining, shorter leases can make a property significantly harder to mortgage and sell.

What is a leasehold?

A leasehold property in the UK is a type of ownership where you own the property, but not the land it stands on. The length of ownership is set out in a legal agreement with the owner of the land and property, known as the freeholder.

As the UK Government explains: “You’ll have a legal agreement with the landlord (sometimes known as the ‘freeholder’) called a ‘lease’. This tells you how many years you’ll own the property.”

Although you have purchased the property, a leasehold arrangement effectively means you still have a landlord. You may be paying a mortgage and covering all household costs, but you are still leasing the property for a fixed period of time.

What is a freehold?

A freehold property gives you outright ownership of both the property and the land it stands on. There is no fixed ownership period, and you do not need to negotiate lease extensions or follow conditions set out in a lease agreement.

The freeholder owns the property and the land beneath it. In leasehold arrangements, the freeholder will usually receive ground rent payments from the leaseholder. This means that, despite paying a mortgage, the leaseholder may still need to pay rent to the freeholder.

Given the choice, freehold ownership is generally more desirable. However, freehold properties are often more expensive, which is important to bear in mind.

What happens when a leasehold expires?

When a leasehold expires, ownership of the property and land reverts to the freeholder. The leaseholder no longer has any legal interest or rights over the property.

For example, if your property had 60 years remaining on the lease in 2019, ownership would return to the freeholder in 2079, even if your mortgage had already been fully repaid.

Once this happens, several outcomes are possible for the leaseholder. You may be:

• Served notice to vacate the property, as you no longer have the legal right to live there. The freeholder would need a court order to enforce this.

• Offered a periodic tenancy agreement, where you continue living in the property while paying rent to the freeholder.

• Given the opportunity to renew the lease.

• Offered the chance to purchase the freehold.

• Entitled to compensation if you carried out significant improvements to the property, such as extensions or major renovations.

As you can see, most of these outcomes involve either additional costs or reduced rights for the leaseholder. There are also very few automatic legal protections once a lease has expired.

Do leasehold properties lose value over time?

Yes, leasehold properties can lose value as the remaining lease term decreases. The decline is often gradual at first, but it can become much steeper once the lease drops below 90 years, particularly under 80 years.

Buyers and mortgage lenders often see short leases as a financial risk because of rising extension costs and reduced long-term security.

A flat with 120 years remaining may hold a similar value to an equivalent freehold property, while a flat with only 60 years left could sell for considerably less.

The impact on value depends on a few things, including:

• Remaining lease length

• Ground rent terms

• Property location

• Service charges

• Mortgage availability

• Extension costs

How do I know how long is left on my lease?

There are several ways to check how much time remains on a lease. If you’re buying a property, the estate agent should usually be able to provide this information, as they will have access to the lease title. Your conveyancing solicitor can also find the details in the Leasehold Property Enquiries (LPE1) pack.

If you already own the property, you can ask the freeholder directly.

Another option is to search for the property through HM Land Registry. For a small fee, you can download a copy of the Leasehold Title, which clearly states the lease term and expiry date.

When reviewing the Leasehold Title, look underneath the section that refers to “the land is held” to find the lease term and expiry details. 

What is a good remaining lease length?

Many property experts consider 90 years or more to be a healthy lease length.

Properties with more than 100 years remaining are usually viewed favourably by lenders and buyers. Concerns tend to increase once leases fall below 85-90 years. As a general guide:

100+ years: Strong position

90+ years: Usually mortgage-friendly

Below 80 years: Extension costs increase

Below 70 years: Mortgage options reduce significantly

Below 60 years: Difficult to sell conventionally

How do you extend a leasehold?

According to the UK Government, leaseholders can request a lease extension at any point during ownership. The Leasehold and Freehold Reform Act 2024 introduced major changes in favour of leaseholders, including the removal of the previous two-year ownership rule.

This means you no longer need to own the property for two years before applying to extend the lease or purchase the freehold.

Step 1: Check Your Eligibility

First, you’ll need to confirm that you qualify for a lease extension. In most cases, the lease must originally have been granted for more than 21 years.

You may not qualify if the property:

• Was provided as part of a charity’s work

• Is owned by the Crown Estate

• Belongs to the National Trust

• Is commercial property or held under a business lease

Step 2: Get the Premium Valued

Next, you’ll need to calculate the premium payable to the freeholder.

Under reforms introduced in February 2025, leaseholders can now extend leases up to 990 years, rather than the previous 90-year limit. Ground rent is also reduced to a “peppercorn” value, meaning it effectively becomes zero.

To calculate the premium accurately, most leaseholders instruct a specialist RICS surveyor. Surveyor fees typically range from around £300 to more than £1,000, depending on the level of service required.

Step 3: Serve a Section 42 Notice

Once you have confirmed eligibility and obtained a valuation, you can formally notify the freeholder by serving a Section 42 Notice.

This legal document outlines your intention to extend the lease and includes your proposed premium and terms. Many leaseholders choose to instruct a specialist solicitor to handle this part of the process.

Once received, the notice is registered with HM Land Registry, which helps protect your legal position during negotiations.

Step 4: Negotiation

The freeholder has two months to respond with a Section 45 Counter-Notice. They may:

• Accept your claim and terms

• Accept your claim but propose different terms

• Reject your claim

If negotiations fail, you can apply to the First-tier Tribunal to settle the dispute.

Step 5: Completion and Extension of the Leasehold

Once terms are agreed, your solicitor will finalise the new lease agreement. After the premium and fees are paid, the lease extension is registered with HM Land Registry.

How much does it cost to extend a lease?

The cost of extending a lease can vary significantly depending on the property and the remaining lease term.

One of the biggest factors affecting cost is the number of years left on the lease. Generally, the shorter the lease becomes, the more expensive the extension will be. Costs tend to rise sharply once the lease drops below 80 years.

Online lease extension calculators can provide a rough estimate, but professional valuations are usually more accurate.

As a general guide:

Can a freeholder refuse to extend a lease?

Qualifying leaseholders usually have statutory rights to extend their lease, so a freeholder cannot refuse without valid legal grounds.

Some leaseholders also negotiate informal extensions directly with the freeholder, although the terms can vary considerably. Independent legal advice is recommended before agreeing to any informal arrangement.

Government changes affecting leaseholders in 2026

Leasehold reform remains a focus for the UK Government in 2026, while the Leasehold and Freehold Reform Act 2024 was designed to strengthen leaseholder rights and make lease extensions more affordable.

Here’s a quick breakdown of the main benefits: 

• Removal of the marriage value payment, making it cheaper to extend a leasehold with fewer than 80 years remaining.

• Increase of the standard leasehold extension from 90 to 990 years. 

• Abolishment of the two-year rule, allowing leaseholders to extend their agreement or purchase the freehold as soon as they own the property.

• No more leasehold homes to be granted (with some exceptions).

• Leaseholders have the right to request information about service and administration charges.

• Leaseholders no longer have to pay their landlord’s legal costs when claiming poor management practices. They can also apply to claim all their legal costs in these instances be paid by the landlord. 

You can read more about this and see a list of all the legal changes via the House of Commons Library.

Is it hard to sell a leasehold property?

Selling a leasehold property can be more complicated than selling a freehold property, particularly if the lease is short or includes expensive ground rent clauses. Buyers and lenders are often cautious of leases with fewer than 80 years remaining because extension costs can rise significantly.

Selling a property with a short lease

A short lease does not make a property impossible to sell, but it can reduce the number of interested buyers.

Cash buying companies may still purchase leasehold properties that mortgage lenders are unwilling to finance.

Can you sell a property with an expired lease?

Selling a property with an expired lease can be extremely difficult through traditional estate agents. Once the lease has expired, legal ownership rights usually revert to the freeholder unless a renewal or extension agreement is reached.

Specialist legal advice is strongly recommended in these situations. Some cash buyers and specialist property companies may still consider purchasing properties affected by lease expiry issues.

Should you sell or extend a leasehold property?

The right option depends on your circumstances, finances and long-term plans. Extending the lease may help preserve property value and improve mortgageability. Selling could make more sense if:

• You want to avoid extension costs

• The property has become difficult to mortgage

• You need a quicker sale

• The lease is already very short

Professional valuation and legal advice can help clarify which route is most suitable.

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