What Happens When a Leasehold Expires?

When a leasehold expires, the property will revert back to being a freehold instead of a leasehold. This means that ownership of the land and property will go back to the freeholder. And you as the leaseholder no longer have any rights or interest in the property.

For example, let’s say you had another 60 years left on the lease of your property in 2019. By 2079, even though you may have paid your house repayments outright, the property’s ownership would revert to your landlord.

When this happens, a number of different outcomes can occur for the leasehold owner. You may be:

Served a notice to vacate the property, as you no longer have legal right to live there. The freeholder will need a court order to do this.
Served a notice to assume a periodic tenancy, where you pay rent to the landlord.
You may be given the option to renew your lease agreement.
You may be given the option to purchase the freehold.
You may be entitled to compensation if you made significant improvements (e.g. renovations or extensions) to the property.

As you can see, most of these require a significant cost or reduction of rights for the leasehold owner. There are no legal rights you will have around this either.

The oft-damaging repercussions of leasehold agreements and lack of rights for the leasehold owner are big reasons why Scotland abolished new residential leaseholds in 1974. However, as I covered at the start of this article, they’re still quite prevalent in England, as well as Wales and Northern Ireland.

“I believe I’m not the only elderly person facing this kind of financial challenge despite having paid off my mortgage years ago,” Icylyn Goddard said in that Guardian article. “The situation I’m in is distressing and unjust. The choice I am faced with is either to be forced out of my own home or to be subjected to unreasonable financial demands because of the terms of the leasehold agreement.”

Case Studies: Real-World Leasehold Experiences

Case Study 1: Paying Rent After Expiry

Diane Taylor also wrote about Levi Thomas in her article for the Guardian, sharing how Mr Thomas and his wife had been paying monthly rent on a house they once thought they owned outright. The situation was this:

Mr Thomas bought a leasehold property in 1974 and eventually paid off the mortgage. Unlike a freehold property, which would have belonged to Mr Thomas from this point, the leasehold property went back to the freeholder when the lease expired in 2008. According to Taylor, Mr Thomas didn’t even realise the property was a leasehold or that they needed to extend the agreement before it expired.

He only knew about it when he received a letter as the first correspondence about the leasehold’s impending expiry. By then it was too late. Mr Thomas was able to get an assured tenancy on the property once the lease had expired. But this meant all those years paying off the mortgage counted for nothing and the Thomas’ forced to pay a monthly rent of £1,040.

“Now he is 86 it is very difficult for him to afford this amount every month,” Mr Thomas’ daughter, Janice, said in the article. “I understand that the freeholders are within their rights legally to do this but at his age and having paid off his mortgage a long time ago, my dad is really struggling and will not be able to leave his house to his children.”

Case Study 2: Being Evicted After Expiry

The following story written by John Dunne and published in the Metro in 2025 is a cautionary tale about how complicated and sticky leasehold agreements can be. The story was about Sue and Bill Aylott, both in their seventies, who were evicted from their home after a leasehold expiry. What makes this even stickier is that the leasehold wasn’t even their contract to manage.

The Aylott’s were renting their house in Streatham from Lambeth Council. They thought the council owned the home, but in fact Lambeth Council only had a leasehold agreement with another freeholder. When Lambeth Council failed to extend the leasehold with the freeholder, who wanted to take the property back, the Aylott’s lost their home of over 40 years.

“We are heartbroken. We have paid our rent to the council for many years. We had no idea someone else owned it,” Mrs Aylott said in the article. “We have spent so much money on improving the house inside and out. We have just replaced all the carpets and we have built a pond in the garden. We have made it lovely and now someone else will benefit after all our hard work.”

This is a very real risk for homeowners on a leasehold. Essentially, any of the work and money you’ve put into the property may or may not be compensated, depending on the situation. While the Aylott’s did receive some payments from Lambeth Council to cover their home loss and moving, it seemed to be little compensation for the stress and disappointment they faced from losing their home.

Freeholders taking back properties that have been on leasehold is something that’s quite common these days as the value of property has jumped in recent years. Where once it might have been more profitable to extend the lease, many freeholders are deciding to resume ownership of the property to potentially sell or rent for much more than previously thought.

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How do you find out how long is left on a leasehold agreement?

There are a few ways you can find out how long is left on a lease. If you're a buyer, then typically the estate agent should be able to tell you how long is left, as they will have access to the lease title. You can also find information about the leasehold length in the Leasehold Property Enquiries (LPE1), which your conveyancing solicitor will request.

If you already own the property, you can also ask the freeholder for this information.

Another option is to search for the property details via the UK Government and Land Registry. You’ll need to pay £7, but you should be able to get a copy of the Leasehold Title. This will clearly tell you how long is left.

When you’re reading the Leasehold Title, you can find the term that the lease expires underneath the sentence that should read something along the lines of “under which the land is held”.

How do you extend a leasehold?

According to the UK Government, you can request an extension of your leasehold agreement from your landlord at any point in your occupancy. This has changed recently, in favour of leasehold owners, thanks to the Leasehold and Freehold Reform Act 2024, which received Royal Assent back in May 2024. Along with other reforms that have strengthened leaseholders’ rights, this act abolished the two-year leasehold rule.

What this means is that you no longer have to own the property for at least two years before you can extend the leasehold agreement. You can also request to buy the leasehold (i.e. become the freeholder) from the first day you own the property.

“A Dickensian quirk of the leasehold industry has finally been kicked into touch,” said Michelle Lawson of Lawson Financial in a 2025 article by The Sun. “It has never made sense to have a two-year wait and this will open many doors for property owners and property beneficiaries to now tidy up the ownership.”

Now that we’ve cleared that up, here are the typical steps you need to follow when extending a leasehold:

Step 1: Check Your Eligibility

First things first, you need to make sure you’re eligible for a lease extension. The main box you need to tick is that your lease was a long lease (over 21 years) when it was originally agreed upon. This shouldn’t be a problem for most modern leaseholds.

You may not be eligible if the property:

Has been provided as part of a charity’s work
Is owned by the Crown Estate
Is a National Trust property
Is a business or under a commercial lease

Step 2: Get the Premium Valued

Next you’ll want to work out how much premium you’ll need to pay to the freeholder to extend your lease. This is where another change from the Leasehold and Freehold Reform Act 2024 is benefitting leasehold owners.

In the past, leasehold owners have only been able to extend the agreement a maximum of 90 years. But with new regulations as part of the act, as of February 2025, you’re now able to increase the leasehold term to 990 years. When you also pay a premium, you essentially reduce the ground rent to a “peppercorn” (i.e. zero financial value).

However, the cost of this premium requires an accurate and professional valuation of the property in the current market. You can employ the services of a specialist RICS leasehold surveyor, who will give you an accurate and legally sound valuation. With this, you can make an offer to the freeholder.

However, you will need to pay a surveyor’s fee. According to the RICS, this is usually anywhere from £300 to over £1,000 depending on what level of service you need.

Step 3: Serve a Section 42 Notice

Once you have your eligibility and professional valuation in hand, it’s time to notify the freeholder of your desire to extend the lease. Once you serve the freeholder a Section 42 Notice, the formal process officially begins.

Here’s a good Section 42 Notice template you can use as a guide if you’re not sure how to put one together. However, it’s probably a good idea to employ a specialise lease extension solicitor. A Section 42 is essentially a legal document notifying the freeholder of your intention to extend the lease. It also includes your proposed premium and terms, including how long you’d like to extend the leasehold for.

The Land Registry will register the Section 42 once it’s been received. This places legal protection upon your claim and the date of claim, which is important for ensuring the premium value doesn’t change during your negotiation process.

What happens if your freeholder is absent?

If you have an absent freeholder, you won’t be able to serve a Section 42 Notice. Instead, you’ll need to apply for a vesting order under the Leasehold Reform, Housing and Urban Development Act 1993.

You need to apply for this through the County Court, providing your proof of eligibility, evidence of attempts to find your freeholder, and a professional valuation.

Step 4: Negotiation

Depending on your situation, you may not need to worry about this step. Basically, your freeholder has two months to respond to your Section 42 with a Section 45 Counter-Notice. If they don’t provide one of these within two months, you can apply for a vesting order through the County Court.

In the Section 45, the freeholder will either:

Accept your claim and terms
Accept your claim and propose new terms
Deny your claim

If it’s the third one, they should provide reasons for why. If the freeholder proposes new terms, you’ll need to negotiate. If you don’t reach an agreement on the terms or premium amount within two months after receiving the Section 45, you can take your case to the First-tier Tribunal. You have six months after receiving the Section 45 to take it to the tribunal, if you wish.

Step 5: Completion and Extension of the Leasehold

Hopefully, with or without negotiations, you reach an agreement and are able to legally complete the leasehold extension. You’ll usually have a solicitor for this part, who’ll draft and review the new lease, which you and the freeholder will both sign. You’ll then need to transfer the amount for the premium and any other fees to complete the extension. Finally, your solicitor will register the extension with Land Registry.

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How much does a leasehold extension cost?

Calculating how much your leasehold extension is going to cost means considering numerous factors specific to your situation. This is why the cost of leasehold extensions can vary so much from house to house or flat to flat.

One of the biggest variables when calculating the price of your extension is the length remaining on your leasehold. As the years remaining get lower and lower, the cost for extending your leasehold becomes higher and higher. This is why it’s advisable to extend your leasehold as soon as possible and to avoid purchasing leasehold properties with only a small amount of years left on the agreement (more on that below).

I’ve included a table below that gives you a guide on how you can expect the cost to increase depending on how many years remain on your leasehold. However, for a more accurate figure, I recommend you get in contact with a professional leasehold extension solicitor or company dealing in this area.

You can also use one of the many leasehold extension calculators online. Some of these aren’t very accurate, and even the ones that are may use different calculation methods than a professional property valuation. My advice is to use at least three online calculators and work out the average cost. This should give you a good idea of what you can expect to pay.

My favourite leasehold extension cost calculators online are:

You can also use calculators from lease extension specialists, like this one from Homehold. However, these may not be as accurate and they sometimes store your contact details for marketing purposes.

As promised, here’s a general breakdown of how the cost of your lease extension can increase depending on how many years are remaining. Keep in mind that the actual cost will vary depending on your property’s condition, the current real estate market, the solicitor you choose to support your process, and the ground rent.

Years Remaining on Lease	Estimated Premium	Estimated Professional Fees	Total Estimated Cost
95	£5,000	£1,500	£6,500
85	£6,000	£1,500	£7,500
79	£8,500	£1,500	£10,000
70	£14,000	£1,500	£15,500
60	£24,000	£1,500	£25,500
40	£40,000	£1,500	£41,500
20	£60,000	£1,500	£61,500

As you can see, it’s always a good idea to extend your leasehold while there’s still a lot of time remaining on the agreement. Delaying this for years can result in you spending a lot more money to keep your home, as the cost jumps considerably once it drops below 70 years remaining.

What does ‘marriage value’ mean for a leasehold extension?

Previously, marriage value only applied to leasehold extensions when the years remaining on the agreement fell below 80. According to the Leasehold Advisory Service, this value was determined by calculating the difference between:

The value of the leaseholder’s interest under the present lease
The value of the leaseholder’s interest under the new lease

As you might imagine, this value being added onto the premium and legal fees could make extending a leasehold agreement that had under 80 years remaining very expensive. Fortunately for leaseholders, the Leasehold and Freehold Reform Act 2024 has abolished the requirement to pay marriage value. This will no doubt make it easier and cheaper for homeowners to extend leaseholds regardless of how many years are remaining.

How else does the Leasehold and Freehold Reform Act benefit leasehold owners?

As you may have already realised from reading about the experiences of leaseholders above, before the Leasehold and Freehold Reform Act 2024 there was an imbalance between the rights of leasehold and freehold owners. Now that this reform has come into effect, there are more regulations in place that benefit and protect leaseholders from potentially disastrous circumstances, like losing their home or having the pay extortionate amounts to extend their lease.

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.

What should you consider before buying a leasehold?

Before taking any further steps on purchasing a leasehold property, carry out your own extensive research on the flat or house you are buying. Look to see how much the ground rent, annual service charges and insurances will cost.

A crucial part of your research into the property will be knowing how long is left on your lease. If a property has less than 70 years left, you might struggle to sell the property in years to come or gain house repayments on it now. Ultimately, if you’re purchasing a leasehold property, try to choose one with a long lease (around 90-120 years left at the minimum). If you can find one with more than 120 years remaining, even better.

Pros and cons of buying a leasehold property

After reading this article, you may think buying a leasehold property only has negative outcomes. However, there are some pros to go along with these cons. Here’s a quick breakdown:

Pros	Cons
Lower purchase price than freehold properties.	More ongoing costs like ground rent (for existing leases) and service charges, which can increase over time.
Access to Prime Locations where freehold properties are too rare or expensive.	The property value can decrease over time as the leasehold decreases and extending it becomes more expensive.
Less responsibility for maintaining the communal areas.	Some leasehold agreements may make it more difficult to sublet, renovate or make improvements to the property.
You may have potential to purchase the freehold eventually.	Short leasehold agreements can make it harder to remortgage or sell the property.
More security and rights thanks to the Leasehold and Freehold Reform Act 2024.	You may have to deal with disputes with your freeholder, which can be costly and stressful.

What is ground rent?

Ground rent is typically an annual fee paid by a leaseholder to a freeholder. Think of it as a payment to ensure you as the leaseholder can legally occupy the freeholder’s land. Before the Leasehold Reform (Ground Rent) Act 2022, ground rent was usually associated with long leases of more than 21 years.

However, most leaseholds that have been created since this reform in 2022 no longer require the leaseholder to pay ground rent. Instead it’s set at a nominal ‘peppercorn’ rate (£0) after the leaseholder pays the premium. For existing leases that date back before 2022, ground rent payments can range from £10 to hundreds of pounds each year. According to the English Housing Survey, between 2021 and 2022 the average annual ground rent cost was £298.

If you’re entering a new leasehold agreement or extending your current one, based on these regulations, you should be able to reduce your ground rent to £0.

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Are all flats leasehold in the UK?

No, not all flats in the UK are leasehold, but the majority are. According to the UK Government, between 2021 and 2022, 82% of all private flats were owned via leasehold agreements. With the UK Government’s commitment to ban new leasehold properties (with some exceptions), we should see this percentage decrease over the coming years.

Instead of leasehold, flats will be sold on a commonhold basis. This would allow flat owners to own their homes outright while sharing the responsibility and cost for maintaining communal areas.

Do leasehold properties lose value over time?

Generally speaking, leasehold properties in the UK do lose value over time. The more the leasehold on the property decreases without being re-negotiated, the more the property value drops. However, this can be counteracted by market changes. For instance, if the market increases significantly in your local area while your leasehold decreases, the property could still increase in value.

Negotiating a leasehold extension will add value to your property, especially if the leasehold has decreased below a desirable amount of years. This is typically above 80 or 90 years, though the higher the better.

Let’s say you own a flat worth £250,000. Here's a breakdown of how much your property value could decrease over time if you don’t extend your leasehold:

Years Remaining on Lease	Estimated Property Value	Value Depreciation	Considerations
100	£250,000	100%	Full market value with a long lease.
90	£245,000	98%	Still considered a long lease so minimal impact on value.
80	£237,500	95%	Slight decrease in value as lease extensions can cost a lot more after 80 years.
70	£225,00	90%	Mortgage lenders may not grant as much, so the value of the property drops here.
60	£212,500	85%	Mortgage lending and lease extensions become harder.
50	£200,000	80%	Another threshold where the value drops significantly as the pool of potential buyers diminishes.
40	£175,000	70%	Some mortgage lenders may not approve a mortgage for the property.
30	£150,000	60%	Steep drop in value as it’s much harder to get a loan at this point.
20	£125,000	50%	At this point your property may only appeal to buyers who don’t need a loan, such as a cash buyer.
10	£100,000	40%	The value may be at its lowest here and the property may be very difficult to sell.

What’s the best way to sell a leasehold property that’s close to expiry?

As you can see from the table above, it can become harder and harder to sell a leasehold property as the years on the agreement diminish. According to Blackstone Solicitors, mortgage lenders are less likely to finance a property with a short lease. This can reduce the pool of potential buyers to only those who don’t need a loan, making it harder to sell for a good price.

One of the best options is to sell your property through a professional cash buyer like The Property Buying Company. We buy property in almost any condition for cash, covering all the fees associated with the process. We also do it quickly, with many of our sales only taking 2-3 weeks. This can often save sellers a lot of stress and energy.

Consider the money and time you might spend extending your leasehold agreement to make it more valuable on the open market. Or the low value you might get through an estate agent if you don’t extend the lease. We can help you sell your leasehold property fast for a good price without having to bother with all the admin, fees and stressful back and forth that comes with extending it or selling it through an estate agent.

You can learn more about how we buy your property for cash. If you’re interested in speaking to one of our buyers, just submit your postcode through the widget below.

Edit Log

06/06/2025 - Content written by Kirsty Rowett, supported with property sales information by Raphael Kaye
06/06/2025 - Content updated in line with Editorial Guidelines (Reviewed by Mathew McCorry)

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