Leasehold. Just the word makes some property owners anxious — and rightly so, if they don't understand how it works. Chiswick has a significant proportion of leasehold properties: the conversion flats along the High Road and Sutton Court Road, the purpose-built mansion blocks in Gunnersbury and Bedford Park, and even some houses held on long leases.
The question I get asked most often is: "I have a lease with 85 years left — should I extend it now?" The honest answer, almost universally, is yes. But let me explain exactly why.
Understanding the 80-Year Rule
The single most important number to understand in leasehold is 80 years. Under the Leasehold Reform, Housing and Urban Development Act 1993, the calculation used to determine the lease extension premium changes fundamentally when the remaining term drops below 80 years.
Above 80 years, the premium is calculated as the sum of:
- The diminution in the value of the freeholder's interest (the "ground rent capitalisation")
- The relativity uplift (the difference in value between a short and long lease)
Below 80 years, an additional component is added: marriage value. This is 50% of the increase in the combined value of the freehold and leasehold interests that results from the grant of a new lease. In practical terms, marriage value can add tens of thousands of pounds to the cost of a lease extension — sometimes more than the basic premium itself.
A Real-World Example
I recently acted for a leaseholder in Sutton Court Road, Chiswick, who had a flat with 82 years left on the lease. She was considering extending but thought she had plenty of time. I explained the 80-year rule and ran through the numbers:
- With 82 years remaining: estimated extension premium £12,500
- With 79 years remaining (in three years' time): estimated extension premium £22,000
- With 75 years remaining (in seven years' time): estimated extension premium £35,000+
She served the Section 42 notice within a month. The additional cost of waiting would have been significant — and unnecessary.
Other Reasons to Extend Sooner Rather Than Later
Beyond the 80-year rule, there are other compelling reasons to extend your lease:
- Mortgage difficulties: Most mortgage lenders require at least 70–85 years remaining at the end of the mortgage term. A lease below around 80 years at the time of a mortgage application can make remortgaging difficult or impossible.
- Saleability: A buyer who wants to use a mortgage cannot purchase your flat if the lease is too short. Restricting the pool of potential buyers reduces the sale price and can make the property very difficult to sell at all.
- Peace of mind: A 999-year lease means you never need to think about lease length again. That has real, quantifiable value.
The Statutory vs Informal Route
You have two routes to extend your lease:
- Informal (voluntary) extension: You negotiate directly with the freeholder. No fixed process, no minimum new term, ground rent is a matter of negotiation. Fast but potentially disadvantageous without professional advice.
- Statutory extension (under the 1993 Act): You serve a formal Section 42 notice. You're entitled to an extension of 90 years added to the current term, at a peppercorn ground rent (essentially zero). The freeholder cannot refuse — they can only dispute the premium. This is the standard approach and strongly recommended.
For the statutory route, you need to have owned the property for at least two years before serving the notice. If you're buying a leasehold property with a short lease, check whether you can take over an existing notice from the seller.
Why You Need a RICS Registered Valuer for a Lease Extension
The lease extension premium is calculated by a complex formula. Getting the valuation wrong — either too high (you overpay) or too low (the freeholder rejects it and the matter goes to the First-tier Tribunal) — costs money. A RICS registered valuer with specific leasehold expertise is essential for negotiating a fair premium.
Our team at Chiswick Surveyors includes RICS registered valuers with extensive leasehold experience across West London. We act for leaseholders in extension negotiations and can advise you from initial valuation through to completion. Get in touch to discuss your situation.
Related Guides
- Property Valuation: Your Complete Guide
- Our Lease & Leasehold Services
- Contact our RICS registered valuers
Sarah Mitchell
RICS-accredited surveyor and registered valuer. Specialises in leasehold valuations and lease extension negotiations across West London.