What Is An Informal Lease Extension?
An informal lease extension is negotiated directly between the leaseholder and the freeholder, outside of any statutory framework.
- Negotiated directly with the freeholder
- No statutory framework governing the process
- Terms can vary significantly from one offer to another
- Potentially faster than the statutory route
What Is A Statutory Lease Extension?
A statutory lease extension follows the process set out in the Leasehold Reform, Housing and Urban Development Act 1993, beginning with the service of a Section 42 Notice.
- Initiated by serving a Section 42 Notice on the freeholder
- Operates within a defined legal framework with statutory protections
- Adds 90 years to the existing unexpired term
- Reduces the ground rent to a peppercorn for the remainder of the lease
Key Differences
Both routes can produce a longer lease, but the protections and outcomes available to the leaseholder differ materially.
- Legal frameworkInformal: None — purely contractualStatutory: Defined statutory process
- Extension lengthInformal: Whatever is agreedStatutory: 90 years added to existing term
- Ground rentInformal: Can be retained or variedStatutory: Reduced to a peppercorn
- SpeedInformal: Potentially fasterStatutory: Defined timetable, can take longer
- DisputesInformal: No tribunal recourseStatutory: Tribunal rights available
- Certainty of outcomeInformal: No guaranteed outcomeStatutory: Statutory protections apply
What Tribunal Decisions Teach Us
Tribunal decisions often arise because parties disagree about valuation assumptions and premiums. They show how comparable lease extension disputes have been resolved when both sides' figures were tested under scrutiny. See our running summary of recent tribunal outcomes for live examples, and our lease extension timeline guide for how long the statutory route typically takes. If you already have a freeholder's figure, you can benchmark your lease extension quote against comparable cases.
That makes them an important reference point when assessing whether an informal offer is reasonable. Without that context, it can be difficult to know whether the figure on the table reflects a fair outcome — or simply the freeholder's opening position.
LeaseIntel benchmarks user-supplied quotes against comparable First-tier Tribunal decisions, rather than producing a single calculator figure.
Why The Cheapest Offer Is Not Always The Best Offer
A lower premium can look attractive in isolation, but the wider terms of the offer often matter just as much as the headline figure.
- Ground rent clauses. An informal offer may keep an existing ground rent or introduce escalation clauses that the statutory route would remove.
- Future costs. A shorter extension may simply defer the cost of extending again — often at a higher premium later.
- Lease terms. Unusual covenants, restrictions or service charge provisions can be embedded into an informally extended lease.
- Long-term implications. The cheapest headline figure today is not always the most valuable outcome over the remaining ownership of the flat.
Questions To Ask Before Accepting An Informal Offer
- How does the premium compare to comparable cases?
- What happens to the ground rent under the offer?
- How long is the extension being offered?
- Are there any unusual lease clauses being introduced?
- How does the offer compare with the statutory rights available?
Compare Your Offer Against Comparable Cases
Before accepting an informal offer, understand how similar lease extension disputes and negotiations have been resolved.
Check My QuoteFrequently asked questions
Methodology
Inclusion criteria, exclusions, sample size and calculation methodology vary by analysis. Statistics are based only on cases containing sufficient data for the relevant variables.
This page is a comparative explainer rather than a numerical analysis. It draws on themes observed across First-tier Tribunal decisions and the statutory framework under the Leasehold Reform, Housing and Urban Development Act 1993.
Caveats
- Tribunal decisions represent disputed cases rather than the entire market.
- Not all decisions contain every data field.
- Sample sizes vary by analysis.
- Small sample groups should be interpreted cautiously.
Compare Your Offer Against Comparable Cases
Before accepting an informal offer, see how comparable lease extension disputes and negotiations have been resolved at tribunal.
Check My QuoteLeaseIntel provides information and benchmarking based on tribunal decisions. It does not provide legal advice or valuation advice.