Leasehold Extension Premium Estimator
Use this calculator to estimate the likely premium for extending a residential lease. It provides a planning-level figure only.
What this leasehold calculator extension tool does
Extending a lease can protect resale value, improve mortgage options, and remove pressure from a shrinking term. This calculator gives an estimate of the premium a leaseholder may pay to extend the lease, based on core valuation components used in practice: term value, reversion value, and (where applicable) marriage value.
It is designed for early planning, not legal or valuation submission. The final premium can differ because of negotiation, evidence, tribunal outcomes, and property-specific factors.
How the premium is typically built
1) Term value (loss of ground rent)
When a lease is extended with ground rent reduced to peppercorn, the freeholder loses future ground rent income. The calculator discounts that stream of rent into a present value using the capitalisation rate you enter.
2) Reversion value (postponed right to vacant possession)
The freeholder’s right to receive the property back is pushed further into the future by the extension. The difference between today’s discounted reversion values (before and after extension) forms the reversion element.
3) Marriage value (usually when under 80 years)
Where the remaining term is below 80 years, extending the lease may create additional value. Under common statutory assumptions, that extra value is shared, often with 50% payable within the premium calculation. This is why many leaseholders act before the 80-year threshold.
Inputs explained in plain English
- Property value with a long lease: the market value if lease length were no longer a major discount.
- Ground rent: annual rent payable under the current lease.
- Years remaining: unexpired term at today’s date.
- Extension years: extra years added to the lease term.
- Capitalisation rate: discount rate used for valuing rent income.
- Deferment rate: discount rate used for valuing the delayed reversion.
- Relativity: value of current short lease as a percentage of long lease value.
Why this estimate can differ from a formal valuation
Professional valuers build detailed models around local evidence, lease clauses, review patterns, tribunal precedents, and negotiation strategy. Even small changes in deferment rate or relativity can materially move the premium. This tool is best used as a scenario planner so you can compare outcomes before seeking formal advice.
Practical tips before starting your lease extension
- Run several scenarios with conservative and optimistic assumptions.
- Check whether your lease has escalating ground rent clauses.
- Gather comparable sales of short and long lease flats in your area.
- Speak to a specialist surveyor and leasehold solicitor early.
- If near 80 years, act quickly to avoid potential marriage value impact.
Example use case
Suppose a flat is worth £400,000 on a long lease, with £300 ground rent and 74 years remaining. With standard assumptions, the estimated premium may be noticeably higher than if the lease had 82 years left, because marriage value can apply below 80 years. That single timing difference can affect five-figure sums in some markets.