Lease Extension Calculator
Estimate the cost of extending your lease using the standard Leasehold Reform formula. Includes premium breakdown and professional fees.
How lease extension costs are calculated
The cost of extending a lease is determined by a formula set out in the Leasehold Reform, Housing and Urban Development Act 1993 (for flats) and the Leasehold Reform Act 1967 (for houses). The premium has three components: the capitalised value of the ground rent stream, the diminution in the freeholder's reversion, and (for leases under 80 years) a share of the marriage value.
Marriage value is the most significant component for short leases. It represents the increase in the combined value of the lease and freehold interest that results from the extension. The leaseholder must pay 50% of this gain to the freeholder. This is why extending before the lease drops below 80 years is strongly recommended.
This calculator provides an estimate based on standard assumptions. Actual costs depend on a formal valuation by a RICS-qualified surveyor. The Leasehold and Freehold Reform Act 2024 is expected to change the calculation method and may abolish marriage value — check current legislation before proceeding.
Frequently asked questions
- How accurate is this estimate?
- This calculator uses the standard Leasehold Reform formula with typical assumptions (5% deferment rate for flats, 6% capitalisation rate). Actual costs vary depending on the specific property, the freeholder's valuation, and negotiation. Use this as a starting point — always get a formal valuation from a RICS surveyor before proceeding.
- What is marriage value and why does it make short leases expensive?
- Marriage value is the increase in the combined value of the lease and freehold that results from extending the lease. Below 80 years, the leaseholder must pay 50% of this gain to the freeholder. As the lease gets shorter, the current lease value drops further below freehold value, making the marriage value — and the total premium — much larger.
- Can I extend my lease at any time?
- You have a statutory right to extend after owning the property for at least two years. Flats get a 90-year extension at a peppercorn (zero) ground rent. Houses get a 50-year extension. You can also negotiate an informal extension at any time, though this doesn't require the freeholder to agree.
- Will the Leasehold Reform Act change the calculation?
- The Leasehold and Freehold Reform Act 2024 received Royal Assent but key provisions (including changes to the premium calculation and potential abolition of marriage value) require secondary legislation that has not yet been enacted. Until the new rules come into force, the existing formula applies.
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