Leasehold Extension Calculator

The cost of extending a leasehold property lease is calculated using a statutory valuation method set out in the Leasehold Reform, Housing and Urban Development Act 1993. The premium has three components: the landlord's loss of ground rent for the remaining term, the landlord's loss of the reversion (the value of getting the flat back when the lease expires, less the much smaller value of that reversion once it is pushed back by 90 years), and, where 80 years or less remain, 50% of the marriage value, which is the increase in value created by the extension itself.

Marriage value is payable when the unexpired term is 80 years or less and is disregarded only above 80 years, which is why the standard advice is to extend while more than 80 years remain. On a £350,000 flat with a £200 ground rent, the calculator's defaults give a premium of about £9,555 with 81 years left and about £17,495 at 79 years. Two assumptions drive the rest of the sum, the capitalisation rate (typically 6-8%) and the deferment rate (typically 5%, as set by the Sportelli ruling), and modest changes to either move the premium noticeably.

Working from the current statutory method, the calculator returns an estimated premium broken down by component, so you can see how much of the bill is lost ground rent, how much is reversion and how much is marriage value. Marriage value turns on relativity, the value of the existing lease as a percentage of the freehold value, and the calculator suggests a typical figure from published relativity graphs that you can replace with your valuer's. Results are indicative rather than binding, and a formal RICS surveyor valuation may differ, particularly where the capitalisation and deferment rates in your area are contested between the parties.

A leasehold flat gives you the right to occupy the building for a fixed term, typically 99-125 years when first granted, and that term ticks down every year. Once it falls to 80 years or below the practical problems begin, because mortgages become harder to arrange and the value of the flat drops. A statutory extension adds 90 years to whatever remains, so a lease with 70 years left becomes a 160-year lease. What it costs turns on the years remaining, the ground rent payable and the value of the flat.

Premiums vary hugely. On a £400,000 flat with a £200 ground rent, the calculator's defaults (5% deferment, 7% capitalisation, typical relativity) give a premium of about £7,794 with 90 years left, £10,513 at 81 years, £18,579 at 80 years, £32,216 at 70 years and £73,325 at 50 years. On top of the premium come your own solicitor at £1,500-£3,500 and a surveyor or valuer at £1,000-£2,500, plus the freeholder's reasonable valuation and legal costs, typically £1,500-£3,500, which the current law puts on you. All in, most extensions land between £8,000 and £40,000.

There are two routes to an extension. The statutory one begins with a Section 42 notice under the 1993 Act, adds 90 years to the current term and reduces the ground rent to a peppercorn, effectively nothing. The old rule that you must have owned the flat for two years was removed on 31 January 2025, so you can start the statutory process as soon as you own a long lease. An informal extension is whatever the freeholder agrees to, often a replacement 99-year lease, and it is usually cheaper at the outset while leaving the ground rent in place for the rest of the term.

The Leasehold and Freehold Reform Act 2024 received royal assent in May 2024, but only parts of it are in force: the removal of the two-year ownership rule (31 January 2025) and changes to the right to manage (3 March 2025). Its new valuation method, which would remove marriage value, cap the ground rent used in the valuation at 0.1% of the freehold value and have the government set the deferment and capitalisation rates, and its 990-year extensions are not yet in force. The government says they need fixes through a Commonhold and Leasehold Reform Bill and rates set in regulations, and its consultation on those rates closes on 21 October 2026. A High Court challenge by freeholders failed and is under appeal. Until the new method starts, marriage value is still payable on leases with 80 years or less, and the timing is uncertain. New build flats have had ground rents capped at a peppercorn since 30 June 2022.