Leasehold Valuation Calculator
Use this calculator to estimate a lease extension premium using a simplified UK leasehold model (term value + reversion + marriage value where applicable).
Important: This is an educational estimator only and not formal valuation, legal advice, or a substitute for a specialist surveyor report.
What this leasehold valuation calculator does
This leasehold valuation calculator estimates the premium a leaseholder might pay to extend a lease. In simple terms, it tries to model the value of what the freeholder gives up when the lease is extended.
In many practical lease extension discussions, the premium can be thought of as three parts:
- Term value: the present value of the future ground rent income.
- Reversion value: the present value of receiving the property back at the end of the lease term.
- Marriage value: often relevant when the lease is below a threshold (commonly 80 years), representing uplift in value shared between parties.
How the calculator works
1) Term value (ground rent stream)
The calculator discounts future ground rent payments back to today using your selected capitalisation rate. If you enter a rent growth rate, it models rising rent over time before discounting.
2) Reversion value
The reversion is the current value of the freeholder receiving the property interest at lease expiry. The farther out that date is, the lower the present value tends to be (assuming a positive deferment rate).
3) Marriage value (below threshold)
Where lease length is below the marriage threshold, the calculator applies a simplified marriage value approach:
- Estimate current leasehold value using relativity.
- Estimate increase in value on extension.
- Deduct term and reversion already accounted for.
- Split remaining uplift 50/50, with half added to premium.
This method is intentionally simplified but gives a practical directional estimate.
Input guide: what each number means
Property value
Use a realistic market value for an equivalent property with a long lease (or freehold equivalent as appropriate in your market).
Ground rent
Enter the annual ground rent currently payable. If your lease has complex review clauses (doubling every 10/25 years, RPI links, stepped rent), treat this as a first-pass approximation.
Years remaining
This is one of the most sensitive inputs. As the term gets shorter, the premium can increase significantly, especially near and below key thresholds.
Capitalisation and deferment rates
These rates strongly influence the result. Lower rates generally produce higher present values and therefore higher estimated premiums.
Relativity
Relativity is the short lease value as a percentage of long lease value. If left blank, this tool uses an internal estimate based on lease length. If you already have a surveyor-backed relativity assumption, enter it directly.
Worked example
Suppose a flat has:
- Long lease equivalent value: £350,000
- Ground rent: £250 per year
- Years remaining: 72
- Capitalisation rate: 7%
- Deferment rate: 5%
The calculator estimates term and reversion first, then applies marriage value (because 72 is below 80). The result is not a legal determination, but it helps you understand where negotiation ranges may start.
Why this is useful before speaking to professionals
- Helps you test scenarios (for example, different rates or property values).
- Shows how sensitive the premium is to lease length.
- Provides a framework for questions to ask your valuer or solicitor.
- Gives a budgeting starting point for premium plus fees.
Limitations and assumptions
Every lease is different. Clauses, rights, restrictions, local comparables, building specifics, and tribunal evidence can materially change outcomes. This tool does not model every legal or valuation detail and should not be treated as a binding figure.
- No legal interpretation of your individual lease document.
- No tribunal-case-specific relativity graph selection.
- No adjustment for unusual review clauses or intermediate interests.
- No inclusion of legal/surveyor costs, taxes, or admin fees.
Frequently asked questions
Is this calculator accurate enough to rely on for a final offer?
No. It is best used for planning and education. Final decisions should rely on professional valuation and legal advice tailored to your lease and jurisdiction.
What if my lease has doubling ground rent?
This calculator uses a simplified annual growth rate input. For precise treatment of doubling intervals and stepped clauses, ask a specialist valuer for a full cash-flow model.
Why does the premium jump below 80 years?
Because marriage value can apply below that threshold, and that additional component can materially increase the amount payable.