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Lease extension premium

Lease Extension Cost Calculator 2026

Estimate the statutory premium to extend a leasehold flat or house using the 1993 Act actuarial formula. Covers ground rent capitalisation, reversion value, and marriage value — with a comparison showing the impact of the Leasehold Reform Act 2024.

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Lease Extension Premium Estimator

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New leases granted after June 2022 have zero ground rent.

Using Sportelli rate: 5% for flats

How the lease extension premium is calculated

Under the Leasehold Reform, Housing and Urban Development Act 1993, the statutory premium for a lease extension is calculated using an actuarial formula with three components: the capitalised value of the ground rent, the landlord's reversion value (the right to reclaim the property when the lease expires), and — for leases under 80 years — marriage value.

The formula uses two key rates: the capitalisation rate (typically 7% for flats), which values the ground rent income stream, and the deferment rate (typically 5%), which discounts the future reversion value back to today's money.

The 80-year threshold — why it matters

When a lease has fewer than 80 years remaining, marriage value applies. This is the additional value created by the extension itself — the landlord is entitled to 50% of the uplift in value that the extension generates. This can add tens of thousands of pounds to the premium and makes extending urgently important for anyone approaching this threshold.

The Leasehold Reform Act 2024 proposes to abolish marriage value and extend the standard extension term to 990 years, but its full commencement is phased. This calculator shows both the current 1993 Act figure and the projected 2024 Act figure for comparison.

Assumptions & caveats

This calculator is an indicative estimate only. Any serious lease extension requires a formal RICS valuation and specialist solicitor — do not negotiate, serve notice, or agree a premium on the basis of this figure alone.

  • Capitalisation rate defaults to 7% and deferment rate to 5% — typical starting points for central London flats. Regional tribunals have used different rates, and recent First-Tier Tribunal decisions can move the market by 0.5–1.5 percentage points either way.
  • Marriage valueis included at 50% when the lease is under 80 years. The Leasehold and Freehold Reform Act 2024 proposes to abolish marriage value, but most commencement provisions are still awaiting secondary legislation — the "projected 2024 Act" figure assumes abolition has taken effect, which may not yet be the case when you serve notice.
  • Property value is assumed to be the current open-market value with the short lease. Getting this number wrong materially distorts the premium.
  • Landlord's costs(Section 60) — the leaseholder pays the landlord's reasonable valuation and legal fees in addition to the premium. This calculator does not include those, nor your own solicitor and surveyor fees (typically £2,500–£6,000 combined).
  • Qualification rules apply. You must usually have owned the flat for at least two years to exercise the statutory right (this is being reformed). Non-qualifying tenants negotiate an informal extension and the premium can differ.
  • Houses vs flats — the 1993 Act formula is for flats. Houses use a different regime (Leasehold Reform Act 1967); figures for houses are approximate.

Use this to decide whether to start the process and to budget; commission a RICS valuation before committing to a premium or serving a Section 42 notice.

Frequently asked questions

How much does it cost to extend a lease?
The cost depends on the remaining lease length, the annual ground rent, the current property value, and the capitalisation and deferment rates used by valuers. A flat with 75 years remaining might attract a premium of £5,000–£20,000, whilst a flat with 55 years remaining could cost significantly more due to marriage value. A formal RICS valuation is required to establish the precise figure.
What is marriage value in a lease extension?
Marriage value is the extra value created when a short lease (under 80 years) is extended. Extending the lease increases the property value, and under the 1993 Act the landlord is entitled to 50% of that uplift. This can substantially increase the premium for leases below 80 years. The Leasehold Reform Act 2024 proposes to abolish marriage value, but its commencement is phased.
When should I extend my lease?
You should extend your lease before it drops below 80 years. Once the remaining term falls below 80 years, marriage value applies and the premium increases significantly. Additionally, many mortgage lenders will not lend on properties with fewer than 70 years remaining, which restricts your ability to sell or remortgage.
What is a statutory lease extension?
A statutory lease extension is a legal right under the Leasehold Reform, Housing and Urban Development Act 1993. Qualifying leaseholders of flats can compel their landlord to grant a 90-year extension on top of the current term, with the ground rent reduced to zero (a peppercorn). You must have owned the property for at least two years to qualify.
Do I need a solicitor to extend my lease?
Yes. You will need a specialist leasehold solicitor to serve the Section 42 notice and negotiate or litigate the premium with the landlord. You will also need a RICS-qualified surveyor to carry out a formal valuation and advise on a reasonable premium. Both costs are typically borne by the leaseholder.

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