Lease Extension Calculator 2026 – Premium, Marriage Value and Reform Status
A statutory lease extension under the Leasehold Reform, Housing and Urban Development Act 1993 adds 90 years to your existing term and reduces the ground rent to a peppercorn (nil). In exchange, the freeholder is compensated with a premium — and that premium is what this calculator estimates, using the same three components a valuer would price: the ground rent the landlord loses, the postponed reversion, and marriage value where the lease has dropped below 80 years.
Estimates and formal valuations are different things. The calculator uses standard assumptions — a 6% capitalisation rate, the 5% deferment rate set in Sportelli, and relativity drawn from blended industry graphs — but real premiums are negotiated, and escalating ground rents, short terms or unusual lease structures move the numbers materially. Treat the result as a budgeting figure and the starting point for advice, not an offer.
How the Premium Is Calculated
The Three Components
The term compensates the freeholder for losing your ground rent for the rest of the existing lease, valued by capitalising the annual rent at around 6%. The reversion compensates for waiting an extra 90 years to get the flat back, calculated by deferring the freehold vacant possession value at 5% a year. Marriage value — the third component — only exists where the unexpired term is below 80 years, and is split 50/50 between leaseholder and freeholder under the current statute.
Worked Example — 72 Years Unexpired
Take a flat worth £350,000 with a long lease, 72 years unexpired and £250 annual ground rent. Capitalising the rent gives a term of roughly £4,100. Deferring the freehold value gives a reversion around £10,700. Relativity at 72 years is about 88.5%, producing marriage value of roughly £8,100 — a total premium in the region of £23,000. Run your own figures in the calculator above; every 5 years of unexpired term makes a substantial difference.
Marriage Value and the 80-Year Rule
Marriage value is the uplift created when the lease and freehold interests are "married": an extended flat is worth more than the sum of the two separate interests, and the 1993 Act gives the freeholder half of that gain — but only where the unexpired term is under 80 years.
The key input is relativity: the value of your current short lease as a percentage of the freehold vacant possession value. At 79 years relativity is still around 92%, so marriage value is modest; by 60 years it has fallen to roughly 83% and marriage value has grown into a five-figure component on most London flats.
This is why the 80-year threshold dominates lease extension strategy. Crossing it doesn't produce a sudden cliff — marriage value grows from zero as relativity falls — but once below 80 years, every further year adds cost on two fronts: a shrinking relativity and a rising reversion. If your lease is at 81–83 years, starting the statutory process before the term dips under 80 is usually worth significantly more than any plausible saving from waiting for reform.
The Leasehold and Freehold Reform Act 2024 legislates for 990-year extensions, abolition of marriage value, and an end to leaseholders paying the freeholder's costs. None of those valuation provisions is in force yet. Freeholders challenged the Act's compensation regime by judicial review; the High Court dismissed that challenge in October 2025, but the Court of Appeal has since given several freeholder groups permission to appeal.
Meanwhile the government must consult on the new capitalisation and deferment rates — expected during 2026 — and fix technical defects through the Commonhold and Leasehold Reform Bill before commencement, which realistically lands between late 2026 and 2028. Our Leasehold and Freehold Reform Act 2024 guide tracks each step.
Extend now or wait? There is no universal answer, but the practical tests are simple. If you are selling or remortgaging soon, lenders and buyers price a short lease today — waiting rarely helps.
If your lease is under 80 years, remember the reforms' headline saving (marriage value abolition) is being litigated and the eventual rates consultation could offset part of it. If you are above 80 years, no marriage value is payable now anyway, so the reform upside is smaller than headlines suggest. The one clear rule: do not let a lease slip below 80 years while waiting for a commencement date nobody can guarantee.
Costs Beyond the Premium
Under the current statute, the premium is only part of the bill — leaseholders also pay the freeholder's reasonable professional costs. Budget for the following alongside the calculator's estimate:
| Cost Item |
Typical 2026 Range |
Notes |
| Your Valuation |
£600 - £1,200 |
Specialist leasehold surveyor; essential for negotiation |
| Your Legal Fees |
£1,500 - £3,000 + VAT |
Statutory notice, negotiation, completion and registration |
| Freeholder's Costs |
£1,500 - £3,000 |
Their reasonable valuation and legal fees — payable by you under current law |
| Land Registry Fee |
£20 - £500 |
Registration of the new lease, current online scale |
The 2024 Act will largely end the freeholder-costs rule when commenced — each side will generally bear its own costs — but until then it applies to every statutory claim. Legal fee levels sit within the government's guideline hourly rates framework. If funding the premium is the obstacle, bridging finance is sometimes used to complete an extension before a sale.
Our Lease Extension Services
Connaught Law's approach is to run the statutory process so the calculator's estimate becomes a completed extension: serving a valid Section 42 notice, coordinating your valuation, negotiating the premium against the freeholder's counter-notice, and applying to the First-tier Tribunal where negotiation stalls. Flat owners extending together, or buying their freehold outright, can often do better through collective enfranchisement — we advise on both routes, alongside our wider property law services.
What We Handle for You
- Strategy First: extend now vs wait, statutory vs informal deal, and timing against the 80-year threshold
- Section 42 Notices: validity is unforgiving — a defective notice can cost you 12 months and a rising premium
- Negotiation Support: working with your valuer against the counter-notice, with Tribunal backup where needed
- Completion and Registration: new lease drafting, mortgage lender consent and Land Registry registration
- Fixed Fees: transparent quotes separating our fees from the premium, valuation and freeholder costs
Frequently Asked Questions
How is a lease extension premium calculated?
Three components: the capitalised ground rent the freeholder loses (valued at around 6%), the reversion — the freehold value deferred at 5% a year for the extra 90 years — and, where the unexpired term is under 80 years, half of the marriage value. Our calculator prices all three from your term, ground rent and flat value. Formal valuations refine the same framework with property-specific evidence and negotiated relativity.
What is marriage value and how is it calculated?
Marriage value is the gain created when your lease and the freehold are "married" by an extension: the extended flat is worth more than the two separate interests combined. It is calculated as the extended value minus the sum of the current interests — yours measured by relativity, the freeholder's by term plus reversion — with the statute giving the freeholder a 50% share. It applies only where the unexpired term is below 80 years.
Why does the 80-year mark matter so much?
Below 80 years, marriage value becomes payable and the freeholder takes half of it — and the component grows every year as relativity falls. At 79 years it might add a few thousand pounds; by 60 years it is often the largest single element of the premium. If your lease sits at 81–83 years, starting the statutory process before crossing the threshold is almost always the financially safer move.
Is there an official HMRC or government lease extension calculator?
No. HMRC does not publish a lease extension calculator — searches for "HMRC leasehold calculator" usually mean the government-funded Leasehold Advisory Service (LEASE) tool, which estimates premiums much as ours does. No calculator, official or otherwise, produces a binding figure: statutory premiums are set by negotiation or by the First-tier Tribunal on valuation evidence.
Should I extend my lease now or wait for the 2024 reforms?
The Leasehold and Freehold Reform Act 2024 would abolish marriage value, but the provision is not in force: the High Court upheld the Act in October 2025, freeholders are now in the Court of Appeal, and the valuation-rates consultation is still awaited — realistic commencement is late 2026 to 2028. If you are selling or remortgaging soon, or your lease is approaching 80 years, waiting carries real, certain costs against an uncertain saving. Above 80 years the reform changes less than headlines suggest, since no marriage value is payable now anyway.
How accurate is this calculator for my flat?
It uses the standard statutory framework and mainstream assumptions, so it is a sound budgeting estimate for a typical flat with a fixed ground rent. It cannot price escalating or doubling ground rent clauses, very short terms, intermediate leases or development potential — those need a specialist valuation. Negotiated relativity alone can move a sub-80-year premium by thousands of pounds either way.
What will I pay on top of the premium?
Under current law: your own valuation (£600–£1,200), your legal fees (£1,500–£3,000 plus VAT), the freeholder's reasonable valuation and legal costs (typically £1,500–£3,000, payable by you), and a Land Registry fee on the current scale. The 2024 Act will largely end the freeholder-costs rule once commenced, but it applies to every claim today.
How long does a statutory lease extension take?
Typically 6–12 months from serving the Section 42 notice: the freeholder has two months to serve a counter-notice, negotiations usually run several months, and completion follows agreement or a Tribunal determination. Informal deals can be quicker but sacrifice the statute's protections — including the peppercorn rent and the 90-year term. If you are mid-sale, the statutory right can be assigned to your buyer with the contract.
Expert Lease Extension SupportSpecialist Leasehold TeamSection 42 notices, premium negotiation and Tribunal representation for flats across London and beyond, handled start to finish
Strategic Timing AdviceExtend-now-or-wait analysis against the 80-year threshold and the 2024 Act’s real commencement prospects for your lease
Fixed-Fee ClarityTransparent quotes separating legal fees, valuation costs and the premium itself, with no surprises arriving mid-claim
The calculator gives you the number; getting it, or beating it, takes a valid notice, strong valuation and disciplined negotiation — contact our lease extension team at Connaught Law for a fixed-fee quotation.
Speak to Our Team