What Does a Lease Extension Cost in England & Wales?
A statutory lease extension adds 90 years and zeroes ground rent — but the premium can vary by tens of thousands depending on years remaining. Here's what drives the number.
Quick answer: A statutory lease extension adds 90 years to your lease and reduces ground rent to zero. The premium you pay depends on the property's value, years remaining, and ground rent — typically ranging from a few thousand pounds on a lease with 85+ years left, to well over £20,000 once you're under 80 years, where "marriage value" kicks in.
What Is a Statutory Lease Extension?
Most leasehold flat owners in England and Wales have the legal right to extend their lease by 90 years and reduce ground rent to a peppercorn (effectively zero), provided they've owned the flat for at least two years. This is separate from any informal deal you might negotiate directly with a freeholder — the statutory route gives you a fixed formula and a right to go to a tribunal if you can't agree a price.
What Determines the Premium You'll Pay?
Three things drive the number: how many years are left on the lease, the property's value once extended, and the ground rent you're currently paying. Surveyors use a "relativity" table to estimate what percentage of the freehold value a lease of a given length is worth, then capitalise the ground rent you're giving up, to arrive at the base premium.
What Is "Marriage Value" and When Does It Apply?
Below 80 years remaining, the law requires you to also pay 50% of the "marriage value" — the jump in the property's value created by extending the lease, split between you and the freeholder. This is the single biggest reason costs escalate sharply once a lease drops under 80 years, and it's why we tell every landlord we work with: extend before you hit that threshold, not after.
How Long Does the Process Take?
Realistically 4-9 months from serving the initial notice to completion, longer if the freeholder is unresponsive or the price is disputed at tribunal. Solicitor and surveyor fees are on top of the premium itself, and — under the statutory process — you're also liable for the freeholder's reasonable costs.
Our Approach
We run the numbers through our own lease extension calculator before we make an offer on any short-lease flat, because the premium can materially change what the deal is actually worth once extended. It's one of the most commonly mispriced variables we see other buyers get wrong.