If you own a leasehold flat and are considering extending your lease, you may have come across the term Section 42 Notice. This is an important part of the statutory lease extension process and can help protect the value and marketability of your property.
At Olden Property, we provide independent lease extension valuations and negotiation advice for leaseholders and freeholders across London, Kent, Sussex and the South East.
In this guide, we explain what a Section 42 Notice is, how the process works, the costs involved and why obtaining professional valuation advice at an early stage is important.
What Is a Section 42 Notice?
A Section 42 Notice, also known as a Tenant's Notice, is the formal legal notice served by a qualifying leaseholder on their landlord to begin a statutory lease extension under the Leasehold Reform, Housing and Urban Development Act 1993.
Under the current legislation, a qualifying flat owner is generally entitled to:
An additional 90 years on top of their existing lease term.
A reduction in ground rent to a peppercorn (effectively zero).
A lease extension at a premium calculated in accordance with the statutory valuation framework.
The notice formally begins the process and establishes the valuation date used to calculate the premium.
It is normally prepared and served by a solicitor specialising in leasehold enfranchisement, with a valuation surveyor advising on the premium to be proposed.
Who Can Serve a Section 42 Notice?
Most owners of flats held under long residential leases will qualify for a statutory lease extension, although certain exceptions apply.
An important change came into effect on 31 January 2025: leaseholders no longer need to have owned their property for two years before beginning the statutory process.
This means qualifying leaseholders can generally begin a claim as soon as their ownership has been registered.
This is particularly useful for buyers purchasing flats with relatively short leases, who previously had to consider the two-year ownership requirement.
Why Is the 80-Year Lease Threshold Important?
The remaining term of a lease is one of the most important factors affecting the cost of extending it.
Under the current statutory valuation rules, marriage value becomes relevant where the lease has 80 years or less remaining.
Marriage value represents the additional value created by extending the lease. Under the existing legislation, the landlord is entitled to a share of that value.
This can increase the premium payable.
For example, a leaseholder with 82 years remaining may be in a materially different position from someone whose lease has fallen below 80 years.
Serving a valid Section 42 Notice fixes the relevant valuation date, including the unexpired lease term used for the premium calculation.
If your lease is approaching 80 years, obtaining a valuation before deciding when to serve notice can be particularly important.
How Does the Section 42 Lease Extension Process Work?
Step 1: Obtain a Lease Extension Valuation
Before serving notice, the leaseholder should instruct a suitably experienced valuation surveyor.
The surveyor will review the lease, assess the property's value and calculate an appropriate premium using the relevant statutory valuation methodology.
At Olden Property, we provide written lease extension valuations to assist clients and their solicitors in establishing a realistic opening position.
Step 2: Instruct a Solicitor to Serve the Notice
A specialist solicitor prepares and serves the Section 42 Notice on the appropriate landlord.
The notice must include prescribed information, including details of the property, the lease and the premium proposed.
The premium should be a genuine opening offer supported by valuation advice.
Serving a valid notice establishes the relevant valuation date and formally starts the statutory procedure.
Step 3: The Landlord Responds
The landlord must respond by the deadline specified in the notice, which must allow at least two months.
The response, known as a Section 45 Counter-Notice, will normally state whether the landlord accepts the leaseholder's entitlement and which terms are agreed or disputed.
In many cases, the landlord proposes a higher premium than the amount offered in the original Section 42 Notice.
Step 4: Negotiations Between Surveyors
Once the landlord has responded, negotiations can take place between the leaseholder's surveyor and the landlord's surveyor.
These negotiations may involve the property's value, deferment and capitalisation rates, relativity and other assumptions relevant to the premium.
An experienced lease extension surveyor can review the landlord's valuation and negotiate an appropriate settlement on behalf of the client.
Step 5: Agreement or Tribunal
Where the parties agree on the premium and other terms, the solicitors can proceed towards completing the new lease.
If agreement cannot be reached, an application may be made to the First-tier Tribunal (Property Chamber) in England to determine disputed terms.
Strict statutory deadlines apply, so it is important that the solicitor monitors the process throughout.
How Much Does a Section 42 Lease Extension Cost?
The total cost will depend on the property, the remaining lease term and the complexity of the negotiations.
There are generally several elements:
The lease extension premium
This is the amount payable to the landlord for granting the new lease.
The leaseholder's professional fees
These normally include the leaseholder's solicitor and valuation surveyor.
The landlord's reasonable professional costs
Under the current statutory framework, the leaseholder is generally responsible for certain reasonable legal and valuation costs incurred by the landlord, although the rules differ for tribunal and court proceedings.
Other expenses
Land Registry fees and other transaction costs may also apply.
At Olden Property, our typical fees for straightforward individual lease extension instructions are:
Desktop lease extension valuation: From £450 + VAT.
Lease extension valuation with inspection: £650 + VAT.
Negotiations: £150 + VAT per hour, where separately instructed.
We provide a quotation before commencing work.
Should You Serve a Section 42 Notice or Negotiate Informally?
Not every lease extension is completed through the statutory procedure.
Some landlords are willing to negotiate an informal extension directly with the leaseholder.
An informal agreement can sometimes be quicker, but the terms may be less favourable.
For example, an informal offer might include a shorter extension or continuing ground rent.
The statutory procedure provides qualifying leaseholders with defined rights and a framework for resolving disagreements.
Before accepting an informal offer, it is sensible to compare the proposed premium and lease terms with those likely to be available under the statutory route.
What About the Leasehold Reform Act 2024?
The Leasehold and Freehold Reform Act 2024 contains significant changes to the lease extension system.
These include provisions for 990-year statutory extensions and the removal of marriage value from the premium calculation.
However, as at November 2026, the principal valuation reforms have not yet been implemented.
The existing statutory valuation framework therefore remains relevant to leaseholders considering serving a Section 42 Notice.
Whether to extend now or wait for reform depends on individual circumstances, particularly the remaining lease term, the property's value and any plans to sell or remortgage.
Why Instruct a Chartered Surveyor Before Serving a Section 42 Notice?
A Section 42 Notice is a legal document, but the premium proposed within it requires specialist valuation advice.
An independent lease extension valuation can help establish a realistic premium, identify the factors affecting the calculation and provide a basis for subsequent negotiations.
At Olden Property, we undertake lease extension valuations for both leaseholders and freeholders.
Our work includes reviewing leases, analysing comparable property evidence, preparing valuation reports and negotiating premiums with the other party's surveyor.
We regularly work alongside solicitors specialising in leasehold enfranchisement.
Section 42 Lease Extension Valuations in London and the South East
Olden Property is based in Tunbridge Wells and provides lease extension advice throughout London, Kent, Sussex and the wider South East.
Our London work includes areas such as Fulham, Islington, Hackney, Camden, Enfield and Croydon.
Whether you own a period conversion, a purpose-built flat or an apartment in a larger residential development, we can provide independent advice on the likely premium and valuation considerations.
Need a Section 42 Lease Extension Valuation?
If you are considering serving a Section 42 Notice, have received a counter-notice from your landlord or simply want to understand the likely cost of extending your lease, Olden Property can help.
Tom Olden MRICS is a Chartered Surveyor and RICS Registered Valuer with experience in lease extension valuations and premium negotiations.
Contact us to discuss your property and obtain a fixed-fee quotation.
This article provides general information and does not constitute legal advice. Statutory lease extension notices and deadlines should be dealt with by a suitably experienced solicitor.