Lease Extension Premium Estimator (UK)
Use this calculator to estimate the cost of extending a residential lease. It gives a planning figure only, not a formal valuation.
What this lease extend calculator does
This tool estimates a likely premium for a lease extension using a simplified valuation model commonly discussed in UK leasehold practice. It combines three core parts of the premium: the value of lost ground rent, the value of delaying freeholder reversion, and (if applicable) marriage value.
It is designed for planning and budgeting. If you are close to serving notice or negotiating with a freeholder, always get advice from a qualified surveyor and solicitor.
How the estimate is calculated
1) Term value (loss of ground rent)
If your lease is extended on statutory terms, ground rent is usually reduced to a peppercorn (effectively zero). The freeholder loses future rent income, so this loss is capitalised into today’s money.
2) Reversion value (delay in getting property back)
Without an extension, the freeholder receives the property at lease end. With an extension, that hand-back date moves much further into the future. The calculator discounts those two outcomes and uses the difference as reversion loss.
3) Marriage value (usually below 80 years)
Once a lease falls below 80 years, extending it often creates additional value. Under standard assumptions, that uplift is shared 50/50 between leaseholder and freeholder after basic landlord losses are considered. This can increase the premium significantly.
Why the 80-year threshold matters so much
Many owners try to extend before the lease drops under 80 years because marriage value can raise total cost quickly. Even a rough estimate can help you decide whether to act now or later.
- Above 80 years: often lower premium pressure.
- Below 80 years: marriage value may be payable.
- Shorter leases generally reduce marketability and mortgage options.
Input guide for better estimates
- Property value: Use realistic local sale evidence for comparable long-lease flats.
- Ground rent: Use current annual amount. Complex review clauses may need expert treatment.
- Years remaining: Check your lease document carefully, including commencement date.
- Capitalisation and deferment rates: Small changes here can move the estimate materially.
- Relativity: If your valuer provides a percentage, enter it for a closer scenario test.
What this calculator does not include
A full lease extension budget should also include professional and transaction costs.
- Leaseholder legal fees and valuation fees
- Freeholder’s reasonable legal and valuation costs (where applicable)
- Land Registry, notice, and administration charges
- Any dispute or tribunal costs if negotiations escalate
Practical next steps
- Run this calculator with conservative and optimistic assumptions.
- Save a range rather than a single number.
- Speak to a specialist lease extension surveyor for formal valuation advice.
- Instruct a solicitor experienced in leasehold enfranchisement.
Frequently asked questions
Is this a formal valuation?
No. It is an educational estimator and cannot replace professional valuation or legal advice.
Can I use this for informal freeholder deals?
You can use it as a benchmark, but informal deals may include different ground rent structures and terms. Always compare long-term cost, not just the headline premium.
How accurate is the result?
Accuracy depends on inputs, especially relativity and valuation rates. Treat outputs as a planning range and validate with an expert before making decisions.