Leasehold Property law. Personally delivered.
Leasehold Property law. Personally delivered.
A landlord's informal offer can be better than the statutory route, or considerably worse. Three things London leaseholders should check before accepting.
Reviewed 25 July 2026
Informal extensions can be quicker, cheaper and more generous than the statutory route. They can also leave you paying twice and ending up with less.
A statutory extension extinguishes the ground rent across the whole of the new term, including the balance of your current lease. An informal extension will often deal only with the extended part, leaving the existing rent payable until the date your original lease would have ended.
On a lease with seventy years left, that is seventy more years of paying it. It is not a rule, though — nothing prevents a landlord agreeing a peppercorn throughout, and many will if it is asked for as part of the deal. It is among the most valuable things to put on the table early, and among the most commonly left off it.
One point in leaseholders' favour: since June 2022 a landlord can no longer attach a rising ground rent to the extended term, or increase the existing one. The old practice of trading a longer term for a doubling rent is no longer available.
An informal extension is a surrender of the existing lease and the grant of a new one. Your lender's charge does not move across by itself. The lender must consent, and a deed of substituted security is required so the charge attaches to the new lease with its priority preserved — and HM Land Registry will not register the new lease without it.
That commonly adds two to four weeks, sometimes more, together with the lender's fees and occasionally a requirement that a panel solicitor acts. On a statutory extension none of it applies: section 58(4) of the 1993 Act transfers the charge automatically, and no lender consent is needed to bring the claim at all. It is a practical advantage of the statutory route that very few leaseholders are told about.
A landlord's solicitor will usually require an undertaking for their costs before beginning. That undertaking is generally not conditional on the deal completing — so if the landlord withdraws, revises the terms or simply stops replying, those costs remain payable.
There is no timetable in an informal negotiation and no forum to refer it to — the First-tier Tribunal has no jurisdiction over a voluntary discussion. If the terms are unreasonable or the draft lease never arrives, there is nothing to be done except start again under the statute, having already paid for the first attempt.
Sometimes, yes. Where a landlord is offering 999 years at a peppercorn for a sensible price, that is better than the statute provides. Where the leaseholders own the freehold themselves, an informal grant is the only sensible route.
What we would not do is negotiate without a valuation of the statutory premium first, give an uncapped undertaking, or let the eighty-year threshold pass while talks continue.
Send us the offer and the lease and we will tell you how it measures against the statutory alternative on term, rent, price and cost.
This article reflects our understanding of the position on 25 July 2026 and is general information rather than legal advice. The law in this area is changing: take advice on your own circumstances before relying on it.
Tell us what has happened and what you would like to achieve, and we will tell you plainly where you stand, what it is likely to cost and how long it will take.
