DAS Finance ← dasfinance.co.uk

What might a lease extension cost?

Three numbers and we'll estimate the premium to add 90 years at a peppercorn rent — and warn you before the 80-year rule makes it dearer.

What the flat would be worth once extended — recent sales of similar flats with long leases are a good guide.
On the lease itself, the land registry title, or your mortgage offer.
Enter 0 for a peppercorn. If it doubles or rises over time, the true premium will be somewhat higher than shown.
—
Estimated premium (guide range)
What the freeholder is paid forEstimate
Reform is coming. The Leasehold and Freehold Reform Act 2024 will change how premiums are worked out — including abolishing marriage value — once the government switches its valuation rules on. Until that day, valuations follow the current method shown here.

Extending before you buy, remortgage or sell?

The premium and legal costs can usually be financed — through the remortgage itself, further borrowing, or a short bridge. Many of our lenders are comfortable lending on short leases where the extension completes on day one.

Talk to us about funding it

How the lease extension premium is worked out

This calculator follows the current statutory method for a flat in England or Wales, where the leaseholder adds 90 years to the existing lease at a peppercorn (nil) ground rent. The premium paid to the freeholder has up to three parts:

  • Lost ground rent. The rent the freeholder gives up, capitalised at 6% a year.
  • The reversion. The value of getting the flat back when the lease ends, deferred at 5% a year. The shorter the lease, the bigger this gets.
  • Marriage value. Once the lease is under 80 years, the freeholder is also paid half the uplift in value that the extension creates.

For example, a flat worth £300,000 on a long lease, with 82 years left and a £250 ground rent, comes out at roughly £9,700. With 79 years left it is about £11,300, and with 72 years about £17,500, because marriage value now applies and the reversion is closer. These are guides, not valuations: a RICS surveyor values the lease before a notice is served.

What it means for leaseholders and landlords

The 80-year mark matters twice. The premium jumps once the lease drops below it, and many mortgage lenders become more cautious as the lease shortens. Most want a minimum number of years left on the lease, often 70 to 85, and some also want a set number of years left at the end of the mortgage term. A short lease can make a flat harder to sell, remortgage or let with a mortgage.

You can agree an extension informally with the freeholder or use the statutory route, which gives you the right to the 90-year extension at a peppercorn. Under the current rules you usually pay the freeholder’s reasonable legal and valuation costs as well as your own. The Leasehold and Freehold Reform Act 2024 will change the valuation method, including abolishing marriage value, once the government brings those rules into force.

The premium can usually be financed, through a remortgage, a further advance or a short bridge. Some lenders will lend on a short lease where the extension completes at the same time as the mortgage.

Related: buy-to-let mortgage calculator, bridging loan calculator and stamp duty calculator, or browse all tools and guides.

Frequently asked questions

How much does it cost to extend a lease?

It depends on the flat’s value, the years left and the ground rent. Under 80 years marriage value is added, so costs rise quickly. Use the calculator above for a guide range, then get a RICS valuation.

Why is 80 years important?

Below 80 years the freeholder is entitled to half the marriage value, which can add thousands to the premium. Many lenders are also more cautious on shorter leases.

How long does a statutory lease extension add?

A statutory extension adds 90 years to the existing term and reduces the ground rent to a peppercorn.

Can I get a mortgage on a short lease?

It is harder. Lenders set their own minimum lease lengths, often 70 to 85 years. Some will lend where the extension completes at the same time as the mortgage.

Can I borrow to pay for a lease extension?

Usually, yes, through a remortgage, a further advance from your current lender or a short bridging loan. We can look at the options for your flat.

All lending is subject to the lender’s underwriting, valuation and criteria at the time of application. DAS Finance Ltd is a credit broker, not a lender.