Lease Extension Premium Calculator United Kingdom

What the lease extension calculator does

The calculator estimates the premium a leaseholder might pay to add years to a residential long lease and shows whether the lease has reached the point where marriage value becomes payable. It takes the years remaining, the value of the flat, the annual ground rent, two professional rates and the relativity of the existing lease, then builds a premium from the parts a surveyor would consider.

A short lease reduces a flat’s value, limits mortgage options and becomes more expensive to extend every year. A rough premium early on helps you judge how urgent the extension is and how much to set aside, well before the formal valuation and legal process.

Why a short lease is a problem

A lease loses value as the remaining term shrinks, and lenders become reluctant to lend on it. Buyers price in the cost and trouble of extending, so a short lease can be hard to sell at a fair price.

The cost of extending rises as the term falls, and it jumps once the lease reaches 80 years or less under the current rules. Waiting usually means paying more later while the flat is worth less in the meantime.

The parts of the premium

• Capitalised ground rent: the ground rent the freeholder would otherwise collect over the remaining term, converted into a present-day sum at the capitalisation rate.
• Reversion: the freehold’s future value, discounted to today at the deferment rate, because the freeholder only gets the flat back at the end of the term.
• Marriage value: the increase in the combined value of the two interests that the extension creates. At 80 years or less remaining, half of it is payable to the freeholder; above 80 years the law treats it as nil.

Adding these gives one estimate. The size of each part shifts with the length of the lease, the ground rent and the rates you choose.

Marriage value and the threshold

Working out marriage value needs the value of the existing lease, expressed as its relativity: the percentage of the freehold value the lease is worth at its current term, usually read from a relativity graph. The figure is specific to each case and cannot be derived from the other inputs, which is why the calculator asks for it.

Crossing the 80-year line is the biggest single increase in cost. The calculator flags whether marriage value applies to your inputs, so you can see whether your lease is on the expensive side. If it is just above 80 years, the usual advice is to act before it slips below.

The Leasehold and Freehold Reform Act 2024 will abolish marriage value, remove the 80-year threshold and change who pays the freeholder’s costs once its valuation provisions come into force. Check with your solicitor which rules apply when you make your claim.

The rates you enter

• The deferment rate discounts the freehold’s reversion to the present. A higher deferment rate lowers the reversion and can reduce the premium.
• The capitalisation rate converts the ground rent into a capital figure. A higher capitalisation rate reduces the capitalised ground rent.

Both are professional judgements and are often disputed. The defaults are illustrative; a surveyor will support the figures used in a formal case with market evidence, and small changes can move the premium noticeably.

Reading your result

The calculator reports the estimated premium and splits it into the reduction in the landlord’s interest, made up of the capitalised ground rent and the deferred reversion, and the marriage value with the half that is payable. Seeing the ground rent separately shows how much of the premium comes from the rent itself.

Treat the premium as a planning figure. The real number is settled through the statutory process or negotiation and depends on evidence specific to your building. A large estimate is a reason to get formal advice quickly.

When to use this tool

• To judge roughly what extending your lease might cost before instructing anyone.
• To check whether your lease is at or below the marriage value threshold.
• To compare extending now with waiting.
• To budget for the premium alongside legal and valuation fees.

Fees and the wider process

Under the current statutory route, the leaseholder usually pays the freeholder’s reasonable valuation and legal fees as well as their own, so several sets of professional charges come on top of the premium. Budget for these from the start.

A statutory claim follows a set timetable, and if the parties cannot agree the premium it can go to a tribunal, which adds months and cost. Many leaseholders instead negotiate an informal extension with the freeholder, which can be quicker but gives fewer protections and may come with a higher ground rent. Weighing the statutory route against an informal deal is a decision where experienced legal advice is worth paying for. Keep an eye on the remaining term throughout, because time moves the premium more than anything else.

This is general information only and not financial advice.

About This Lease Extension Calculator

Use this lease extension calculator to get an instant, accurate estimate. The figures follow official GOV.UK guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.