rics lease extension calculator

What this RICS lease extension calculator does

This calculator gives an instant estimate of lease extension premium using common valuation concepts used in leasehold enfranchisement work in England and Wales. It is designed as a planning tool so leaseholders can understand the scale of potential cost before speaking to a surveyor or solicitor.

For a statutory lease extension, the lease usually gains 90 additional years and ground rent becomes a peppercorn (effectively zero). The premium paid to the freeholder is typically built from three valuation elements:

• Term value: compensation for lost ground rent income.
• Reversion value: compensation for delaying the freeholder's right to vacant possession.
• Marriage value: payable when the unexpired lease term is below 80 years.

How the calculation works

1) Term value (ground rent loss)

The freeholder loses contractual ground rent for the remaining years of the current lease. We discount that stream to a present value using the capitalisation rate.

2) Reversion loss

The freeholder's reversion is deferred by 90 years after extension. The calculator compares the present value of receiving the flat at the current expiry date versus receiving it 90 years later, discounted by the deferment rate.

3) Marriage value (below 80 years)

When the lease is under 80 years, extension increases the lease value materially. The statutory framework typically shares part of this uplift between leaseholder and freeholder. This calculator applies a 50% split to the assessable uplift after deducting term and reversion elements.

Input guidance for better estimates

• Flat value with long lease: Use an estimated market value as if the lease were long and at peppercorn rent.
• Ground rent: Enter current annual rent. If your lease has stepped reviews, this model may under or overstate value.
• Years remaining: Use the exact unexpired term from your lease or title documents.
• Deferment rate: Often starts near 5% for flats, but can vary by evidence and tribunal practice.
• Capitalisation rate: Frequently in the 5% to 8% range depending on rent quality and market evidence.
• Relativity: If you do not provide it, the calculator uses an interpolation model based on term.

Why the 80-year threshold matters so much

Leaseholders often try to extend before 80 years remaining because marriage value can significantly increase premium once the lease drops below that point. Even a small delay can lead to noticeable additional cost, especially for higher-value properties.

Important limitations

This tool is intentionally simplified and cannot replace a professional valuation report. Real-world cases can include:

• Ground rent review patterns and complex rent clauses
• Different property assumptions and local market comparables
• Act rights, intermediate interests, and title-specific legal factors
• Negotiation strategy and tribunal risk

If you are preparing to serve notice, negotiate with a landlord, or proceed to tribunal, always get advice from a qualified lease extension surveyor and specialist solicitor.

Practical next steps

Get a desktop estimate first

Use this calculator to generate a working range and test sensitivity by changing years remaining, deferment rate, and relativity.

Order a professional valuation

A chartered surveyor experienced in lease extension valuation can provide a defendable figure and negotiation strategy.

Coordinate legal timing

Your solicitor can guide eligibility, notice procedure, strict deadlines, and draft terms so your rights are protected.