What’s the Cost of Extending a Lease on a Share of a Freehold?

Extending the lease on your home can be an intimidating and costly process, but it doesn’t have to be. We’re here to help.

Whether you’re a leaseholder looking to extend your lease via your collective freehold, or a share of freehold owner looking to grant a lease extension to yourself or other residents of your block, there are a few key things you need to know about the process and associated costs.

Let us state our position plainly, because almost nobody else will: if you and your neighbours own a share of your freehold, extending your lease should cost you professional fees and nothing else — no premium. You are granting the extension to yourselves. When a share-of-freehold owner tells us they’ve been quoted a four- or five-figure premium to extend, it almost always means something was left untidy when the freehold was bought: no participation agreement, mismatched leases, or a co-freeholder who never got their own extension. Much of Phase 3 of our three-phase process exists to fix exactly that — ideally before it costs anyone money.

So – what’s the cost of extending a lease on a share of a freehold?

What is the Cost of Extending a Lease on a Share of a Freehold?

The cost of extending lease on share of freehold will vary from lease to lease, but you can use our Freehold Purchase Calculator today for an instant valuation on the cost of acquiring your freehold. 

When the freehold ownership is enfranchised, you will essentially be granting a lease extension to yourselves. This means there is usually no premium cost payable for the extension itself other than the standard legal costs, valuation and land registration costs involved.

This is usually the case, though sometimes leaseholders get into a dispute about whether the premium was fairly split at the time, especially if flats have changed hands since. With this in mind, it is important to make sure that all leaseholders agree on the split of legal fees and other costs in advance of extending a lease.In addition, if there was a Participation Agreement in place when the property was collectively enfranchised, it can drastically reduce disputes in the future.

If you do not own a share of the freehold and are a leaseholder in a share of freehold property, then you may need to negotiate with the freehold owners in order to arrange a lease extension. Occasionally, you can do this via an informal lease extension without needing to pay a premium, although it is important that all parties agree on the terms of the agreement beforehand.

Here is what that actually breaks down to, line by line:

Cost line	Share of freehold (all co-freeholders agree)	Leaseholder without a share of the freehold
Premium	None — you grant the extension to yourselves	The dominant cost; calculated on lease length and value, and it climbs sharply once the lease falls below 80 years
Your own legal fees	Payable — drafting and completing the new lease or deed	Payable
Freeholder’s legal and valuation costs	Minimal or shared between co-freeholders	Payable by you on top of your own, under the statutory route
Valuation / surveyor	Often unnecessary or light-touch	Full valuation needed to negotiate the premium
Land Registry	Payable	Payable
What actually drives the timescale	Getting every co-freeholder’s signature	Statutory deadlines, negotiation, and possible tribunal

Lease Extension Basics

What is a lease extension?

A lease extension is when a leaseholder adds an agreed period of time to their lease, usually for a fee, in an agreement between themselves and their freeholder(s). Depending on the terms of the original lease and individual situation, the cost of an extension can vary greatly.

The process of extending your lease generally means that you will receive a new lease for a set number of years, up to 999 years in some cases, usually at a cost. 

The leaseholder may be expected to pay the freeholders’ reasonable costs (including any surveyor’s fees) and a premium known as the ‘premium payable for the extended term’, which is generally calculated using an equation based on market value and other factors such as inflation.

Why might you need to extend your lease with a share of a freehold?

The main reason why people need to extend their lease with a share of a freehold is for sales and mortgages in freehold flats.

If a leaseholder has less than 999 years remaining on their lease length, it can be more difficult for them to sell or remortgage their property, as most mortgage lenders will not provide finance for properties with leases that have less than 80 years to run.

With a share of freehold lease extension, it can be easier to remortgage or sell a property as it increases the value of the property and decreases any perceived risk to lenders. Similarly, purchasing your property’s freehold along with other leaseholders in your building (if you haven’t already done so) can also increase your property value.

Recent developments in the property market have made it apparent that 999 year leases should be the standard for all real estate transactions, as anything less is considered to be inadequate. 

As such, lease extensions are becoming increasingly common for those whose existing leases do not provide this level of protection, and are still an important consideration for those who own a share of a freehold, as a collective enfranchisement will need to grant such extensions.

What Phase 3 Looks Like in Practice: Two Real Blocks

At Garden Lodge Court in East Finchley, twelve flats bought their freehold after the landlord tried to sell it at auction. Once the group owned the building, we opened the lease drawer — and found the leases were in different forms, some containing outright errors, accumulated over decades of piecemeal conveyancing. Rather than extend leases one by one, we updated every lease in the block to standardised, CML-compliant, leaseholder-favourable terms: 999 years at a peppercorn ground rent. The cost to each flat was its share of the legal work — no premium — and the value added was immediate, because every flat became cleaner to mortgage and cleaner to sell. That is what a share-of-freehold ‘lease extension’ should look like: a tidying exercise, not a purchase.

At Lancaster Court, a 34-leaseholder mansion block opposite Kensington Gardens, the lease question was harder because not everyone could fund the same outcome. In Phase 3 we structured the purchase so that £600,000 of long-lease shares sat alongside £500,000 of short leases funded by internal investors, and a £900,000 30-car garage was funded by ten leaseholders at £90,000 each. Without that structure, every leaseholder in the building would have paid roughly £54,000 more. The point for anyone comparing costs: the price of a share-of-freehold lease extension is really decided at the moment the freehold is bought, not the moment the lease is extended. Get the participation agreement, the funding structure and the lease terms right on day one, and the extensions that follow are cheap paperwork.

What is the Cost of Acquiring a Share of Your Freehold?

Above, we discussed how the cost of extending a lease on a share of a freehold without freehold ownership is usually much higher than with freehold acquisition. But what exactly is the cost of acquiring a share in your freehold and how does it match up to lease extension costs?

Well, the cost of acquiring a share in your freehold can vary considerably, depending on the size and nature of the property. Generally speaking, it is advisable to seek professional advice before beginning the process, as you will need to assess your legal rights and obligations under any existing lease and all the leases that may be created through collective enfranchisement.

Haven’t bought a share of your freehold yet? If you and other tenants in your property want to acquire your freehold and benefit from reduced leasehold extension costs, you might be wondering about the overall cost of freehold acquisition.

Our Freehold Purchase Calculator helps your collective enfranchisement gain an idea of their potential freehold purchase costs by providing an instant estimation of the value of their freehold.

And the headline price is more negotiable than most leaseholders assume. At Langton Priory in Guildford we valued the freehold at £140,000–£210,000, then — because the freeholder was insolvent and the freehold sat with administrators — negotiated outside the Act and settled at £30,000, with all twelve flats participating. Every one of those owners now extends at no premium, forever. The acquisition is the expensive step; done well, it is the last expensive step.

Lease Extension vs Share of Freehold Lease Extension

Factor	Share of Freehold	Lease Extension (Without Share of Freehold)
Costs	Usually no premium payable. Pay legal, valuation, and Land Registry fees only.	Must pay premium (can be significant), legal fees, surveyor fees, and Land Registry costs.
Ground Rent	Typically reduced to zero after collective freehold purchase.	May still be liable for ground rent depending on lease terms unless extended under formal route.
Control Over Lease Terms	Leaseholders can agree and update lease terms collectively.	Must negotiate with third-party freeholder; less flexibility in terms and conditions.
Property Value Impact	Can significantly increase property value due to full ownership control and long lease.	Increases value, especially if lease is below 80 years, but less benefit than full freehold.
Long-term Financial Benefit	Often more cost-effective in the long run, especially for blocks of flats.	Can be more expensive over time if repeated lease extensions are needed.

How To Extend a Lease With a Share of a Freehold

1. Gain permission from other freehold shareholders

If you don’t have support of all other freehold shareholders you may have to go through a drawn-out statutory procedure involving court proceedings, which isn’t impossible but is ultimately likely to cost you far more. For this reason, it is always best to ensure that all relevant parties are in agreement before beginning the process.

These are normally difficult discussions, but the freehold purchase experts at The Freehold Collective can help with this! Through our expertise, we can accurately assess the situation and advise on the best way to move forward in order to get everyone’s agreement.

2. Appoint legal advisors

Once you have the support of all other freehold shareholders, it is then time to appoint legal advisors who will take on the responsibility of arranging and completing the enfranchisement.

It’s important that your legal advisors are experienced in leasehold and collective enfranchisement law, as they will be responsible for ensuring the smooth and successful transition of your freehold ownership.

3. Produce a deed of surrender and re-grant or an entirely new lease

The majority of leases are extended by deed of surrender and re-grant, but an entirely new lease can be created for all leaseholders if the current lease is defective or needs updating to be inline with the other building leases.

Your solicitor will support you with this – but this is also a service that TFC provides. Our expert staff can help you create the right lease for your share of freehold property and ensure it’s legally compliant, as well as assist you throughout every other step in acquiring a share of the freehold.

4. Finalise the statutory lease extension process

You will then need to draw up and register the new lease and complete the necessary conveyancing. With Land Registry delays etc. this process can be drawn out, so it really helps to have a project manager involved.

This is another area where TFC can help – our project managers have years of experience helping leaseholders to purchase their freehold and can use this expertise to ensure that the process runs quickly and smoothly.

That project management is not a soft claim: it is what won us ERMA Project Manager of the Year in 2022 and 2023, across cases involving everything from insolvent freeholders to 34-leaseholder blocks with overseas owners.

Once all necessary paperwork has been completed, you will be able to enjoy the benefits of a longer lease on your share of freehold property.

Need Support to Acquire a Share of Your Freehold?

The whole process of extending a lease with a share of a freehold may seem daunting, but our team is happy to guide you through every step of the way. Don’t hesitate to get in touch if you have any questions or concerns – we will do our utmost to make the whole process as easy and efficient as possible.

Prefer to talk it through first? Book a free consultation — we’ll tell you whether your block’s leases need a premium, a tidy-up, or nothing at all.

Cost of Share of Freehold Lease Extension FAQs

Do share of freehold lease owners pay ground rent?

Share of freehold flats usually have no ground rent when the freehold is owned by the leaseholders. If leaseholders do not own the freehold and just hold a leasehold title, they may be liable for ground rent to the third party or collective enfranchisement.

How do I extend the lease on my share of freehold flat?

Flat owners who have a short lease often look towards purchasing the freehold of their property in order to benefit from the reduced leasehold extension costs. By collectively enfranchising, flat owners are able to extend leases on their share of freehold properties with a significant reduction in costs compared to extending an individual lease.

Can I extend my lease if I own the freehold?

Yes — if you own the freehold interest in your building, you can grant a lease extension to yourself or other leaseholders. As a freehold property lease owner, you’ll typically only pay legal and admin fees, with no premium, unlike extending a lease on a leasehold property.

Is it cheaper to extend a lease or buy freehold?

Buying the freehold interest with your neighbours may have a larger upfront cost. but can often work out as much more cost-effective in the long run than individually extending leases on a leasehold property. Once you collectively own the freehold property lease, lease extensions usually no longer require an additional premium. You can use a freehold purchase calculator and lease extension calculator to compare the estimated costs.