Lease Extension Calculator


Getting a lease extension for your property will cost you a fee. That fee will depend on many factors based on your property and yourself. When considering a lease extension, it’s worth knowing how much the premium will likely cost, as it can help you figure out if getting one is a sensible financial move for you. 

Thankfully, if you’re eligible for a statutory lease extension under The Leasehold Reform, Housing and Urban Development Act 1993 (The Act), the law sets the price you pay, not your freeholder. This means that you’re not dependent on the whims and demands of your freeholder and can use a lease extension calculator to provide an accurate amount you’ll likely have to pay. 

By entering a few details about yourself and your leasehold interest, our tool will give you a good estimation of how much you’ll likely have to pay. 

In this guide

Lease Extension Calculator


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How does our lease extension calculator work?

Our lease extension calculator is designed to be simple to use so that you can easily estimate how much your lease extension will cost.

When using the calculator, you’ll only have to input a few simple details about your lease and property to create a reliable and reasonably accurate range of data. 

The first thing you need to input is the remaining term of your lease in years. You must be accurate with this information, as this can hugely affect your final results. 

You’ll also need to input how much you pay for ground rent. As getting a lease extension clears your ground rent and reduces it to nothing, the amount you’re currently paying influences the final price of your lease extension premium. Usually, the more you pay for your ground rent, the more your lease extension will cost. 

In addition, you’ll also need to input the value that you believe your property will be once you extend the lease. As your premium is based in parts on your property’s valuation, this is another critical metric and should be as accurate as it can be to help you get a reliable estimate. 

Once you’ve imputed and submitted all this information, our calculator will use the available guidelines and rules from legislation like The Leasehold Reform, Housing and Urban Development Act 1993 to generate a reliable output. 

Our lease extension calculator is instant and will give you a guide price within seconds, giving you the confidence and information to start your lease extension process. 

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Why do you need to pay for a lease extension?

You have to pay for a lease extension to compensate the freeholder for any loss of money due to the lease extension. When you have a regular leasehold agreement, you’ll be paying an annual ground rent to the freeholder – this is how they generate an income from allowing their property to be sold as a leasehold. 

When you get a lease extension, this ground rent is reduced to nothing, meaning that they’re losing out on all the potential income, so they need to be compensated in some way to cover that. 

In addition, as you’re extending the lease, it means that they cannot do anything with the house and won’t be able to sell it or rent it for an extended period, so you’re paying to cover this as well. 

In essence, the freeholder is set to lose out on potential income once you extend your lease, and in an ideal world, many of them would rather you forget to extend the lease. In short, you’re paying to financially compensate the owner of the land of the property you’re leasing. 

As well as this, you’ll also have to pay the legal, surveying or solicitor fees that the freeholder may have racked up. Because you’re instigating the extension, you are liable for all their costs related to the lease extension negotiations as long as the amounts are reasonable.

What influences the costs of a lease extension?

When a calculator or a surveyor is working to determine how much a lease extension will cost, many factors influence the total outcome. These are attributes associated with the property itself but can also be influenced by the leasehold and its terms. 

There is a formula and guidelines to ensure that you’ll always get a fair price after a surveyor has inspected your property. Still, those are very complicated and potentially difficult to understand. It’s best to fully understand what things can increase or decrease the cost instead of knowing the precise algorithm and mathematical equation used to generate your lease extension premium. Here are some of the things that influence the price of a lease extension: 

  • The decrease in the value of the freeholder’s interest is caused by the additional years added. As a lease extension is financial compensation for the freeholder’s loss of money, it makes sense that you’ll have to pay this when increasing the lease term. 
  • The property’s new value after it gets a lease extension also impacts the cost of extending the lease. As the freeholder would have been the property owner if you didn’t get a leasehold, they are deemed entitled to earn a profit for any property valuation increase. The more the value increases, the more you have to pay 
  • The original ground rent of the property also influences how much you have to pay. As the ground rent is being reduced to nothing, the freeholder needs to be financially compensated for this lack of income. The less ground rent you pad, the less this will influence the overall costs, as it would mean they won’t lose as much money. 
  • The number of years you have left in your leasehold also influences the total cost. It’s been previously stated that the shorter you have left on the lease, the more you have to pay, so the timing of when you get a lease extension dramatically influences the final cost. 
  • The location of your property will also influence your premium. This is because property value differs in various regions of the UK, and the prices grow at different rates. This means that identical properties with the same lease can be cheaper in Stoke than in central London. 

How can I reduce how much I pay for a lease extension?

The amount you pay for a lease extension is typically based on the value of your home, and there’s only a little scope to reduce the costs once you request a lease extension. That said, if you time things well and can serve a reasonable, convincing Section 42 Notice, there are a few tricks and things you can do to ensure you save money and reduce how much you’ll have to pay. The two main things you can do are: 

Negotiate with your freeholder

You and your freeholder can negotiate a lease extension price through a surveyor within a six-month window. When a Chartered Surveyor is instructed to value your property and work out the cost of a lease extension, they will likely give you a range or a price that they consider the highest limit, lowest limit, and middle number. With this information, you’re free to offer any price you decide for a lease extension, and many surveyors will recommend submitting a Section 42 Notice with the lowest acceptable offer. 

The freeholder will likely have done their own calculations and be aware of how much a fair lease extension should be, so they may reject your initial offer and suggest an increased price. This increased price should still be lower than the maximum limit and even the median price in the range, helping you to shave off a few pounds from the final price. 

Do be aware that you only have six months for this negotiation before you need to contact the First Tier Tribunal to set a final fee. If you reach this stage, you risk paying a fee that may have been more than what the freeholder was asking for during your negotiations, so be cautious. 

Start the process before your term drops below 80 years 

Another great way to save money on your lease extension is to extend your lease as early as possible. The fewer years it has left to run, the more it will cost you to extend. 

If you have a lease with less than 90 years to go, consider extending the lease, as each year you wait could cause the extension cost to rise multiple hundreds of pounds.  

That said, you want to avoid paying some of your marriage value to save yourself a lot of money. When your property has less than 80 years to go on its lease, you’ll have to contribute 50% of your marriage value directly to your freeholder alongside any other fees. 

Your marriage value is your property’s increase due to you extending the lease. So if it rises from £250,000 to £290,000, your marriage value is £40,000. Having to contribute 50% of that, which will be £20,000 in this example, is the main reason many people’s lease extensions are so expensive. 

As they have a lot of potential gains, many freeholders will be hoping that your lease falls below this 80-year mark, as they know that you’ll have to pay some of your marriage value. Plus, once you go below this limit, you’re pretty much trapped in getting a lease extension if you want to sell your house. This is because new potential buyers will find it difficult to get a mortgage on a leasehold with a low term, as the options available will be more limited. 

Plus, as the property’s value would have dropped to a low price due to being under 80 on the remaining term, most people will have to get a costly lease extension to recoup money from their initial investment. These factors combined make it so expensive to get a lease extension with a term below the 80 years mark. 

Be sure to negotiate with your freeholder and be sure to extend your lease early to give you the best chance of saving money with extending your lease. You should also make sure that the costs of extending your lease is worth it and that the potential profits and gains are more than what you have to pay to extend the lease. 

Lease Extension Calculator FAQs

The amount you have to pay for a lease extension is determined by many factors based on your property, so it's only possible to say how much you should expect to pay with the required information. The costs can vary depending on your ground rent and how long your lease has left to run, among many other things.  

That's why we offer this free and effective lease extension calculator so that you can tailor the experience to yourself. 

If you're getting an informal lease extension, you are not going through the statutory route and don't have the legal protections or rights to get a lease extension. As a result, the freeholder will determine the cost of your lease extension instead of the law, meaning that they can set any price they please. 

This lease extension calculator only works well for statutory leases, so it may not help those going the informal route. It can inform you of how much you should be paying and what a fair price is, but the freeholder doesn't have to adhere to that value. 

Marriage Value is a term that describes the increase in property value once you extend the lease. One of the best reasons for people to extend a lease is that doing so can make your property increase in value overnight. So if a £200,000 flat increases in value to a £250,000 flat, the marriage value is £50,000. 

This is so important in lease extensions because if you extend the terms of a lease that has less than 80 years remaining, you'll have to pay some of that marriage value to your freeholder. Usually, this is about 50% of the marriage value, on top of your previous lease extension premium. 

This means that extending your lease at this time is super expensive. So, in the previous example, you'll have to pay an extra £25,000 on top of the premium to get a lease extension if you did it with less than 80 years on your term. 

In legal terms, being reduced to a peppercorn means the value has been reduced to zero or a nominal amount. The reason why it's referred to as a peppercorn is because for a contract to be legally binding, you can't have a value of zero. However, the value doesn't have to be a number, so to get around this and to ensure that the lease document is still valid, a peppercorn was used to illustrate this.

When you get a lease extension, your ground rent will be reduced to a peppercorn.  

Using a lease extension calculator should be the first step in your lease extension process. Once you estimate how much you think extending your lease will cost, you'll need to instruct a surveyor to inspect your property, give it a valuation, and then use it to work out an accurate premium. 

Do be prepared for this final premium cost to be slightly different from the calculator, as the surveyor will have more information at their disposal. Once you have a fair price, you can use your surveyor to instruct a solicitor to issue a Section 42 Notice that informs your freeholder of your intentions to extend your lease. This then starts the official legal process. 

Most people believe the final decision on the lease extension cost falls on the freeholder. However, if you're getting a statutory lease extension, they have little power over the final price and have to agree to a premium that has been determined by law. 

The cost of your premium is determined by strict rules and formulas that are per The Leasehold Reform, Housing and Urban Development Act 1993. This means that typically, your surveyor reviewing your property is the one that determines the cost that you offer to the freeholder. 

The freeholder can turn this down, after which the final decision on the price will be made by the Property Chamber, who will, just like your surveyor, use the official rules and legislation to inform their final decision.

The lease extension calculator will only give you an estimate of the cost of the premium and does not include other fees you may incur during the lease extension process. In addition to this fee, you are also liable for both your and your landlord's reasonable professional costs. This means that you'll also have to pay the cost of getting a surveyor and solicitor and may also have to pay legal fees if your case gets taken to a First Tier Tribunal. 

The costs of your lease extension will differ depending on the area where you live, even for identical houses with the same lease terms. This is because the location of your home plays a big part in its overall value. 

Our calculator cannot consider the potential price difference that location may cause, meaning that to get a concrete and fair valuation for your leasehold property, you should use a Chartered Surveyor to complete an inspection and work out a fair premium. 

You'll find that houses in more desirable areas will cost more, so expect to pay a bit more than displayed on the lease extension calculator if your home is near schools, has good transport links, and is close to local amenities. 

The sooner you get a lease extension, the better. This is because the less time you have left on the lease, the more it will cost to extend your lease, and the more the value of your property will fall.

It's widely said that you should ensure that your lease is extended before the term length drops below 80 years. This is because it will almost be impossible to sell your property under this as most providers won't offer a mortgage, and you'll also have to pay half of the marriage value, making extending your lease super expensive. 

If your lease term is below 85 years, consider extending it to prevent issues down the line. 

Although the lease extension cost valuation is worked out by following strict formulas, government rules, and legislation, there is leeway to negotiate to get the best price for you. When a surveyor completes an inspection, they'll usually provide a range of how much the premium will cost. As the leaseholder, you can send an offer at the low point of this range in your Section 42 Notice. 

However, the freeholder will likely have a solicitor working for them to inform them of the property's value, meaning that they can reject your offer if they feel it's too low. A First Tier Tribunal will determine a final value if you can't agree on a price within six months. This premium cannot be negotiated.