Estimate Your Lease Extension Premium
This calculator gives a practical estimate for a statutory 90-year lease extension (peppercorn ground rent) in England and Wales. It is for planning only and not a formal valuation.
Important: real premiums can vary significantly based on tribunal evidence, lease terms, local market, and specialist valuation advice.
What this leasehold extension cost calculator does
If you own a leasehold flat, the value of your lease reduces as the term shortens. Extending your lease usually increases value, improves mortgage options, and makes resale easier. This calculator estimates the likely premium payable to the freeholder using common valuation concepts:
- Term value: compensation for future ground rent that will be lost after extension.
- Reversion value: compensation for delaying the freeholder's right to regain the property.
- Marriage value: often payable when the unexpired term is below 80 years.
It also adds your estimated professional fees to help you budget the total out-of-pocket cost.
Why the 80-year mark matters so much
In many lease extension cases, once the lease drops below 80 years, marriage value becomes payable. This can increase the premium materially. That is why many leaseholders try to act before crossing that threshold.
As a general strategy, the earlier you extend, the lower the likely cost—although each case depends on valuation assumptions and lease details.
Inputs explained in plain English
1) Property value with long lease
Use the value the property could achieve with a long lease (or virtual freehold equivalent in your market). This is a key driver of premium because both reversion and marriage value are linked to underlying value.
2) Years remaining
The fewer years left, the higher the premium usually becomes. This is especially noticeable as you approach and drop below 80 years.
3) Ground rent
Higher ground rent generally increases the term value element because the freeholder is giving up that future income stream after statutory extension.
4) Capitalisation rate and deferment rate
These are valuation rates used to convert future cash flows into present value. Small changes can create meaningful shifts in premium. If you are unsure, start with market-standard assumptions and test a few scenarios.
5) Fees
The premium is not the whole story. Most leaseholders also pay for:
- Their own solicitor and valuer
- The freeholder's reasonable legal and valuation costs (in many statutory routes)
- Land Registry and notice-related charges
How the estimate is calculated
This page uses a simplified model suitable for budgeting:
- Term value is estimated from annual ground rent discounted over the remaining years.
- Reversion loss is estimated as the present value difference between reversion at year N and year N+90.
- A relativity curve estimates short-lease value from unexpired term.
- If years remaining are below 80, marriage value is estimated as 50% of uplift after deducting base losses.
Professional valuers may apply more nuanced assumptions, local evidence, and lease-specific adjustments.
Example planning scenarios
Scenario A: 88 years left
Premium is often more manageable because marriage value may not apply. Extension can still be worthwhile to protect long-term value and reduce future cost risk.
Scenario B: 75 years left
Marriage value may materially increase the premium. Buyers and lenders may also be more cautious with this term length, so extending can support liquidity and price resilience.
Scenario C: 62 years left
Premium can rise sharply. In many markets, short leases at this level can limit mortgage availability, and extension becomes a core value-protection step.
Practical tips to reduce surprises
- Get a specialist lease extension valuer before serving notice.
- Run multiple assumptions (low/base/high rates) to test sensitivity.
- Budget for both premium and all professional costs.
- Start early to avoid crossing key term thresholds.
- Keep clear records of communications and deadlines.
Frequently asked questions
Is this calculator legally binding?
No. It is a planning tool only and does not replace legal advice or a formal valuation report.
Does this work for houses as well as flats?
It is mainly designed for leasehold flat-style extension logic. Leasehold houses and enfranchisement routes can involve different assumptions and rights.
Should I trust one single number?
Use a range, not just a single point estimate. Negotiation outcomes and valuation evidence can shift the final premium up or down.
What should I do next?
Use this calculator to set your budget, then speak to a solicitor and lease extension valuer with local experience. That combination gives you the most reliable path to a realistic outcome.