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Lease extension valuation

Introduction

In this guide

When you extend your lease under the Leasehold Reform, Housing and Urban Development Act 1993 (otherwise known in this guide as the Act), you must pay your landlord (freeholder) a premium (price) for the new lease.

Please note that we cannot provide telephone or written advice on valuation, or marriage value, but you can read the below overview.

What the premium (price) includes

The premium (price) is the compensation your landlord receives for:

  • the loss of ground rent over the remaining term of your lease
  • the delay in getting back possession of the flat (reversion) by adding another 90 years
  • half of any marriage value (if your lease has less than 80 years remaining)
  • any other losses the landlord can show will result from granting the new lease

The Act sets out how these are calculated, but valuation also depends on local property values and assumptions about future rent and sale prices.

Highlighted text

Note that under planned changes in the law, future lease extensions under the Leasehold and Freehold Reform Act 2024 will be for a term of 990 years, instead of the current 90 years. However it's not yet known when this change in the law will happen.

How the valuation works

Both you and your landlord will create your own valuation, based on:

  • how many years are left on your current lease
  • your annual ground rent
  • the market value of your flat now and what it would be worth with a new 90-year extension at a zero-ground rent (called a peppercorn rent)
  • whether the lease term is below 80 years
  • local market conditions and evidence from similar properties

Your valuer will apply the rules in the Act but also professional judgment. The figure produced is an estimate within a range, not a fixed price. Negotiation is expected between your valuer and the landlord’s valuer.

Last updated:
16 December 2025
Next review:
16 December 2027

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