Leasehold Extension Calculator

The cost of extending a leasehold property lease is calculated using a statutory valuation method set out in the Leasehold Reform, Housing and Urban Development Act 1993. The premium has three components: the landlord's loss of ground rent for the remaining term, the landlord's loss of the reversion (the property value they would receive when the lease expires), and 50% of the "marriage value" (the increase in property value created by the extension).

Marriage value only applies when the unexpired lease is below 80 years — this is why it is generally advised to extend before the lease drops below 80 years, as the cost increases significantly. The capitalisation rate (typically 6-8%) and the deferment rate (typically 5% as set by the Sportelli ruling) are key assumptions in the calculation.

Under the Leasehold and Freehold Reform Act 2024, planned changes may remove marriage value from the calculation entirely. This calculator uses the current statutory method and shows the estimated premium, broken down by component. Results are indicative — a formal RICS surveyor valuation may differ.

UK leasehold — what is a lease extension? Leasehold property: own building rights for fixed term (typically 99-125 years initially). Lease ticks down each year — under 80 years problems begin (mortgages harder, value drops). Lease extension: add 90 years to current lease (typical statutory route). After: 'lease term + 90' total. Sample 70-year remaining lease extended: 160-year lease. Cost: depends on years remaining, ground rent, property value. Major UK 2024 reform expected (Leasehold Reform Bill).

The '80-year rule' — critical threshold. Lease drops below 80 years: 'marriage value' becomes payable to freeholder (50% of value increase from extension). Adds significantly to cost. Extend BEFORE 80 years: avoid marriage value entirely. Sample 81-year lease: extension £8,000-£15,000. Same flat at 79-year lease: £15,000-£30,000+ (50% increase due to marriage value). Always extend before crossing 80 years — most UK leasehold owners miss this until too late.

Cost of lease extension. Premium (paid to freeholder): varies hugely by years remaining and property value. Sample £400k flat: 90-year lease £4,000; 80-year £8,000; 70-year £15,000-£25,000 (with marriage value); 50-year £40,000-£70,000. Plus legal costs: £1,500-£3,500 own solicitor + £1,500-£3,500 freeholder's solicitor (you pay both under statute). Surveyor/valuer: £1,000-£2,500. Total typical extension: £8,000-£40,000 depending on years remaining.

Statutory route vs informal extension. Statutory (Section 42 notice under Leasehold Reform, Housing and Urban Development Act 1993): adds 90 years to current term, reduces ground rent to peppercorn (effectively zero). Owned property 2+ years required. Informal extension (freeholder agreement): often shorter terms (e.g. 99-year new lease replacing existing) — typically cheaper but you keep paying ground rent. Statutory route: more expensive upfront but eliminates ongoing ground rent + adds 90 years vs replacing.

Major 2024-2026 leasehold reform. Leasehold and Freehold Reform Act 2024 (royal assent May 2024, full implementation 2026): cheaper lease extensions (marriage value abolished); 990-year statutory extension (vs current 90 years); peppercorn ground rents; right to manage simplified. New build flats: ground rents capped at peppercorn since 30 June 2022. Existing leases: ground rent reform separate Bill, expected 2026/27. If lease has 80+ years: wait for full reform implementation if possible — could save 30-50% on extension cost.