Marriage value applies — lease under 80 years. The freeholder receives 50% of the uplift in value.
Estimated Premium
£17,324
Illustrative estimate based on standard 6% capitalisation and 5.5% deferment rates. Actual premium requires a professional RICS valuation. Seek specialist leasehold advice before proceeding.
What This Calculator Does
This tool estimates the statutory premium payable to extend a flat's lease under the Leasehold Reform, Housing and Urban Development Act 1993 — the formal process leaseholders in England and Wales can use to add years to a short lease.
Enter your flat's current market value, years remaining on the lease, and annual ground rent to get an instant estimate of the three components that make up the premium: capitalised ground rent, deferred reversion, and — for leases under 80 years — marriage value.
How the Calculation Works
The premium has up to three parts. Ground rent (capitalised): the present value of the ground rent the freeholder would have received over the remaining lease term, using a standard 6% capitalisation rate. Deferred reversion: the present value of the freeholder regaining the property at lease end, using a standard 5.5% deferment rate.
Marriage value only applies when the lease has fewer than 80 years remaining. It represents the extra value created by combining ("marrying") the freehold and extended leasehold into one — the theory being an extended lease is worth more than the sum of the short lease and freehold separately. By law, the freeholder is entitled to 50% of this uplift.
This is why lease extension costs rise sharply as a lease drops below 80 years — below that threshold you're not just paying for the lost ground rent and reversion, you're also paying half the value the extension itself creates.
Worked Example
A flat worth £250,000 with 75 years remaining on the lease and £150 annual ground rent.
- Flat value: £250,000
- Years remaining: 75 (under 80 — marriage value applies)
- Ground rent (capitalised @ 6%): ~£2,300
- Deferred reversion (@ 5.5%): ~£40,000
- Marriage value (50% of uplift): ~£15,000
Estimated premium: roughly £57,000 — and because this lease is under 80 years, extending sooner rather than later avoids the marriage value penalty growing as fewer years remain.
Frequently Asked Questions
Why does marriage value only apply under 80 years?
It's set in statute: leases under 80 years trigger marriage value because Parliament decided the "uplift" created by extending is only meaningful below that threshold. Above 80 years, the reversion is far enough away that combining the interests creates negligible extra value, so no marriage value is charged.
Can I extend my lease without going to a tribunal?
Yes — most extensions are agreed directly (or via solicitors) with the freeholder informally. The formal statutory process, including the right to apply to the First-tier Tribunal (Property Chamber) if you can't agree a price, exists as a backstop and to establish your legal right to a 90-year extension at a peppercorn ground rent.
Roughly how much does a lease extension cost?
The premium varies hugely with flat value, years remaining, and ground rent — this calculator gives an estimate for your specific numbers. As a rule of thumb, the premium rises steeply once a lease drops under 80 years, and again as it approaches unmortgageable territory (typically under 70 years).
What is a deferment rate and why 5.5%?
The deferment rate discounts the value of the freeholder eventually regaining the property back to today's money. 5.5% for houses and flats was set as the standard rate by the Lands Tribunal in the Sportelli case and is widely used as the default absent evidence for a different rate.
Is this figure legally binding?
No — this is an illustrative estimate using standard assumptions. The actual premium is agreed through negotiation or tribunal, typically based on a RICS valuer's report. Always get a professional valuation before entering into a lease extension negotiation.