If a Section 42 Notice has been served, this notice will state an offer figure. This is very much the starting point in negotiations as to the price to be paid. You should take professional valuation advice on the likely ‘fair’ premium from a qualified surveyor.
You can always use a Lease Extension Calculator to determine whether the offer seems valid, however the best way to know would be to obtain professional advice.
Even if you are involved in an informal discussion that will lead the grant of a new lease, you should ask the tenant to pay your costs in obtaining valuation advice so that a figure can be offered to the tenant and/or put to the tenant in informal negotiations. As the statutory process requires that your costs are covered under Section 60 of the 1993 Act, it would not be unreasonable to ask the tenant to pay some or all of your legal and valuation costs.