calculator for lease extension

What this lease extension calculator does

This calculator provides a practical estimate of the premium you might pay to extend a residential lease. It is designed for leaseholders who want a fast, transparent starting point before speaking with a surveyor or solicitor.

In plain language, the premium is the amount paid to compensate the freeholder for:

• Loss of future ground rent income.
• Delay in receiving the property back at lease expiry (the reversion).
• Marriage value (usually where the lease is below 80 years).

How the estimate is built

1) Ground rent loss

The model converts your annual ground rent into a present value using a capitalisation rate. A higher capitalisation rate tends to reduce this element of the premium.

2) Reversion loss

The freeholder’s right to possession is pushed further into the future when a lease is extended. The calculator discounts that future right using a deferment rate.

3) Marriage value (important under 80 years)

If your lease term is under 80 years, extending the lease can create extra market value. Under many statutory calculations, part of this uplift is shared with the freeholder. This often causes premiums to rise significantly once a lease drops below 80 years.

Inputs explained

• Property value with long lease: current market value if lease length were not an issue.
• Ground rent: yearly contractual ground rent currently paid.
• Years remaining: unexpired lease term today.
• Extension years: years added to the existing lease (commonly 90 in many cases).
• Capitalisation rate: discount rate used for valuing rent stream.
• Deferment rate: discount rate used for the reversion value.
• Relativity: short-lease value as a percentage of long-lease value. Leave blank to auto-estimate.
• Other costs: professional fees and legal costs added to show likely total cash outlay.

How to use your result

Treat the output as a planning range, not a final figure. Premiums are influenced by valuation evidence, lease wording, tribunal precedents, negotiation strategy, and local market conditions.

• Use the estimate to set a budget and test different scenarios.
• Run sensitivity checks by changing deferment and capitalisation rates.
• If your lease is near 80 years, model both sides of that threshold.

Practical next steps for leaseholders

Before you start formal action

• Order a specialist leasehold valuation report.
• Confirm eligibility and process with a leasehold solicitor.
• Gather lease documentation and recent service charge statements.
• Estimate full costs including valuation, legal, Land Registry, and notice fees.

Negotiation tip

A calculator helps you understand the numbers, but a strong negotiation position comes from evidence. Comparable sales, accepted relativity assumptions, and experienced advisers can materially change outcomes.

Important disclaimer

This calculator is for educational and budgeting purposes only. It does not constitute legal, tax, or valuation advice. Always obtain guidance from a qualified lease extension surveyor and solicitor before serving notices or agreeing terms.