Enter years left on lease
Input the years remaining on your lease (whole years are fine—no months needed).
Enter current ground rent
Enter your annual ground rent (£/pa).
Enter property value
Enter the estimated market value of your property with a 90-year extension at peppercorn rent.
Calculate
Click to see the premium range and a full breakdown.
Ground-rent loss (Freeholder’s lost income)
When you extend, the ground rent becomes a peppercorn (effectively £0). The freeholder loses that income for the rest of the existing term. We capitalise that stream of rent using a standard years-purchase factor (a time-value-of-money calculation).
Reversionary interest (Waiting longer for the asset back)
Without extension, the freeholder regains the property’s full value when the lease expires. With extension, they must wait an extra 90 years. We discount the property’s value back to the present at the end of:
the current term; and
the current term + 90 years, and take the difference.
Marriage value (Lease under 80 years)
Extending a short lease usually makes the flat worth more than the sum of its parts today (tenant’s short lease + freeholder’s reversion). That uplift is called marriage value and, under current rules, the leaseholder typically pays 50% of that uplift.
If the lease is 80+ years, marriage value is not charged.
Calculator Inputs & Assumptions
These are standard, widely used parameters for educational calculators. Professionals may use different rates/relativities depending on market evidence, tribunal precedents, and the particulars of your lease.
Unusual or escalating ground-rent clauses (e.g., doubling, RPI uplifts).
Very short leases (where small changes in assumptions swing the numbers).
A big gap between your estimate and the freeholder’s figure.
You’re planning to negotiate, challenge, or prepare for tribunal.
A valuer brings comparable evidence and expert judgement; a solicitor ensures the process and terms protect your position.
UK investors are turning short leases into gold by purchasing properties with leases under 80 years, extending them, and capturing immediate value uplifts. Property Filter helps you identify motivated sellers with short leases, assess deals in seconds with built-in calculators, and build a profitable portfolio.
Below is a compact, self-contained presentation of the textbook calculation that underpins our breakdown. Symbols:
G – Annual ground rent (£)
T – Years left on the current lease
v – Current market value with the short lease (£)
V – Market value once extended by 90 years at peppercorn rent (£)
ε – Yield/discount rate (6% for ground rent, 5% for reversion)
Years-purchase factor:
Ground-rent loss:
Where ε_GR = 6% in the calculator
Where ε_DEF = 5% in the calculator
Flats (statutory): Your new term is your current unexpired term + 90 years. Ground rent becomes peppercorn (£0) for the whole new term.
Houses (statutory): You get an extra 50 years added from the current lease end. You don't pay a premium for this statutory extension, but the lease switches to a "modern ground rent" during the additional term, which is usually higher than the old ground rent.
This page summarises the standard statutory position in England & Wales. Informal (negotiated) deals can be different—see below.
Example: If you have 67 years left today: your new lease = 67 + 90 = 157 years, and ground rent becomes £0 for all 157 years.
Example: If you have 45 years left today: your new lease end becomes 45 + 50 = 95 years from today. During the extra 50 years, you pay modern ground rent instead of your old ground-rent terms.
Why is the rule different for houses? Houses are covered by a different piece of legislation. The policy intent is that you can either extend by 50 years (with modern ground rent) or buy the freehold (enfranchise). Many owners compare both routes.
Caution: Watch out for escalating ground-rent clauses (doubling, index-linked) that can affect value and mortgageability. If you need a clean outcome, state peppercorn ground rent in the new lease.
The two-year ownership rule for statutory claims was removed on 31 January 2025. You no longer need to wait two years after purchase to start a statutory lease extension or enfranchisement claim.
Parliament has legislated for longer standard extensions (up to 990 years) and other reforms under the Leasehold and Freehold Reform Act 2024, but several provisions require commencement/secondary legislation before they apply. Until commenced, the rules above (+90 for flats, +50 for houses) are the ones you use today.
This tool provides educational estimates only. Figures are based on standard assumptions. Actual premiums depend on specific lease terms, valuation evidence, and negotiations. Always seek professional advice from chartered surveyors and specialist solicitors before making decisions.