What you're actually paying for
A lease extension involves several distinct costs, not just the premium. Here's what to expect:
| Cost component | Typical range | Notes |
|---|---|---|
| Premium (paid to freeholder) | £5,000 – £100,000+ | The largest variable. Depends on lease length, property value and location. |
| Your surveyor | £600 – £1,500 | RICS-qualified valuer to assess the correct premium. Almost always worthwhile. |
| Your solicitor | £800 – £2,000+ | Handles the legal process, drafts and reviews the lease. |
| Freeholder's costs | £500 – £1,500 | Leaseholders are typically required to pay the freeholder's reasonable professional costs. |
| Land Registry fee | £20 – £500 | Registration of the new lease. Fee depends on the premium value. |
| Estimated total | £7,000 – £105,000+ | Wide range reflects variation in premium above all else. |
The premium dominates the total, and it is also the most variable. The professional fees are real costs but they are broadly predictable. The rest of this guide focuses on what drives the premium — because that is where the significant uncertainty lies.
Two factors push premiums highest: crossing the 80 year lease threshold and the marriage value that becomes payable once a lease falls below it. If you already have a quote in hand, you can benchmark it against comparable tribunal decisions.
What determines the premium?
The statutory lease extension formula is not a simple multiplier. Several variables interact to produce the final figure, and legitimate disagreement between valuers on some of those variables is the rule, not the exception.
Remaining lease term
The single most important factor. The shorter your remaining lease, the higher the premium — for two reasons. First, the mathematical calculation of what you are "buying back" from the freeholder is larger. Second, once a lease falls below 80 years, marriage value applies, which adds a significant additional cost. If your lease is approaching 80 years, this is the most time-sensitive decision in residential property. Once you cross below the threshold, the cost of extending increases substantially.
Property value
Premiums are broadly proportional to the value of the property. A £600,000 flat will typically attract a higher premium than a £200,000 flat with identical lease terms, because the freeholder is giving up a share of a more valuable asset.
Ground rent
The higher your ground rent — or the faster it escalates — the higher the premium. This is because the freeholder is giving up that income stream as part of the new lease, and the statutory formula compensates them for it.
Valuation assumptions
This is where much of the legitimate variation (and strategic positioning) occurs. The statutory formula requires two key assumptions: a deferment rate and a capitalisation rate. Within the range that courts and tribunals have accepted as reasonable, a freeholder's surveyor may use assumptions that produce a higher premium, and a leaseholder's surveyor may use assumptions that produce a lower one. Both can be technically defensible. Negotiation between surveyors is partly a negotiation about these assumptions.
Location
London premiums are generally higher than regional premiums. This partly reflects higher property values but also reflects different patterns in what local tribunals have historically determined.
Marriage value
Marriage value is the increase in your property's market value that results from granting a longer lease. Under current legislation, once a lease falls below 80 years remaining, the leaseholder must pay the freeholder 50% of this uplift.
82 years remaining
Flat worth £400,000. Extended to 125 years: worth £420,000. Uplift of £20,000. No marriage value applies.
78 years remaining
Same flat worth £380,000 (markets discount short leases). Extended: worth £420,000. Uplift of £40,000. Half (£20,000) goes to freeholder as marriage value — on top of the standard premium.
This is why a 79-year lease can cost materially more to extend than an 81-year lease on an otherwise identical property. If your lease is anywhere near the 80-year mark, the timing of your extension matters enormously.
Read the full marriage value guideTypical lease extension costs — real examples
The following ranges are illustrative. They reflect broadly what leaseholders have encountered, but your specific circumstances will determine the actual figure. For a quick formula-based estimate based on your inputs, try our lease extension calculator.
London — £500,000 flat
| Years left | Approx. range | MV? |
|---|---|---|
| 85+ years | £10,000 – £20,000 | No |
| 80–84 years | £15,000 – £25,000 | No |
| 75–79 years | £20,000 – £30,000 | Yes |
| 65–74 years | £25,000 – £50,000 | Yes |
| 55–64 years | £50,000 – £90,000+ | Yes |
| Under 50 | £90,000+ | Yes |
Outside London — £250,000 flat
| Years left | Approx. range | MV? |
|---|---|---|
| 80–84 years | £8,000 – £15,000 | No |
| 75–79 years | £12,000 – £18,000 | Yes |
| 65–74 years | £15,000 – £30,000 | Yes |
| 55–64 years | £30,000 – £55,000+ | Yes |
MV = marriage value. These are indicative ranges only. Actual premiums depend on ground rent, valuation assumptions and the specific negotiation. Do not treat these as quotes.
Why online calculators give estimates, not answers
Lease extension calculators — including the widely used one provided by the Leasehold Advisory Service — are a reasonable first step. They let you enter your property details and apply the statutory formula to produce a theoretical premium.
Their limitation is that they use the same valuation assumptions that freeholders use. The output depends directly on what deferment rate and capitalisation rate you enter. Change those rates by half a percent and you get a meaningfully different number — and both numbers can be technically defensible.
| Formula calculator | Tribunal benchmark | |
|---|---|---|
| Based on | Assumed valuation rates | Actual decided cases |
| Output | Theoretical estimate | Comparison against real outcomes |
| Can freeholder dispute it? | Yes — different rate assumptions | Harder — published decisions |
| Most useful for | Understanding the formula | Assessing a received quote |
What tribunal decisions add to the picture
When a leaseholder and freeholder cannot agree a lease extension premium, either party can apply to the First-tier Tribunal (Property Chamber) to have the correct premium determined. Tribunals review the evidence, hear submissions from both sides' surveyors, and publish a reasoned decision.
These decisions are public. They reflect what an independent panel determined was fair — and they reveal what actually happens when freeholder quotes are formally contested.
The pattern that emerges from tribunal decisions is informative: freeholder opening positions are frequently higher than what tribunals ultimately determine. The statutory formula gives valuers room to make assumptions; freeholders tend to use the upper end of the accepted range. Tribunals, applying the same formula, often land lower.
This does not mean every freeholder quote is unreasonable. Some are within the range of what tribunals would award. But knowing where your quote sits relative to tribunal outcomes — rather than relative to another formula estimate — is a materially more useful reference point when deciding whether to accept, negotiate or challenge.
Already received a quote?
LeaseIntel's benchmark service compares your quoted premium against real tribunal outcomes matched by lease length, property value and location. See our methodology for how it works.
Is My Lease Extension Quote Too High?How to use this information
Where you are in the process determines what to do next.
If you haven't yet received a quote
- Act on the lease length. If your lease is approaching 80 years, the cost of waiting is not trivial. Every year below 80 adds to the marriage value component.
- Get your lease documents. You'll need to know your ground rent, the current term, and any unusual lease conditions before you can get meaningful valuations.
- Consider an early opinion. A RICS surveyor can give you a preliminary view on likely premium range before you formally approach your freeholder.
- Understand the process options. You can extend informally or formally via a <Link to="/section-42-notice" className="underline underline-offset-2 hover:opacity-70">Section 42 Notice</Link> — the statutory route that gives you legal protections.
If you have received a quote
- The freeholder's figure is a starting position. Before accepting, negotiating, or serving a Section 42 Notice, it is worth understanding whether the quoted premium is within, above or below the range that comparable tribunals have awarded.
- A LeaseIntel benchmark tells you exactly that — where your quote sits relative to real tribunal outcomes for comparable properties.
Real Lease Extension Cost Examples
Online calculators estimate a premium by applying the statutory formula to a set of valuation assumptions. They are useful for understanding the mechanics, but the output only reflects the inputs you enter — change the deferment or capitalisation rate slightly and the number moves.
Two RICS surveyors reviewing the same flat can legitimately reach different conclusions. Both may be technically defensible under the statutory framework, which is why freeholder quotes, leaseholder counter-offers and eventual tribunal awards frequently sit at meaningfully different points on the same range.
LeaseIntel takes a different approach. Rather than relying solely on a formula, it compares your quote against comparable tribunal decisions — real outcomes from the First-tier Tribunal — so you can see where your quote sits against properties with similar lease lengths, values and locations.
Illustrative Example
LeaseIntel Benchmark Summary
Property
Flat — South London
- Market value: £525,000
- Remaining lease: 76 years
- Ground rent: £250 per year
Freeholder's quote
£43,800
Comparable tribunal range
£39,900 – £42,600
Position
🟠 Above typical tribunal range
Potential saving if negotiated successfully
Up to ~£1,200
Based on comparable tribunal decisions.
Confidence
High
Matched against
37 comparable tribunal decisions
Why?
Comparable tribunal decisions involving similar lease lengths, property values and locations generally clustered below the quoted premium. This does not necessarily mean the quote is incorrect, but it suggests there may be scope for negotiation depending on the valuation assumptions used.
Recommended next step
Review the valuation assumptions and compare against similar tribunal decisions before accepting the quote.
See How My Quote ComparesThis is an illustrative example demonstrating the type of insight LeaseIntel provides. It is not based on a real property or tribunal decision.
Why two similar flats can receive very different lease extension quotes
Two flats with the same lease length, similar values and similar ground rents can still attract materially different premiums. That is not usually a mistake — it is the statutory framework working as designed. Several valuation inputs sit within a range of accepted opinion, and small differences on each one compound into a meaningful difference in the final figure.
Deferment rate
The rate used to discount the future value of the property back to today. Tribunals generally work from a benchmark of around 5%, but the accepted range in practice varies. A lower deferment rate produces a higher premium.
Capitalisation rate
The rate applied to the ground rent income the freeholder is giving up. A lower capitalisation rate treats that income as more valuable, which pushes the premium up.
Relativity
The assumed value of the flat with its existing short lease as a percentage of its value with a long lease. Different surveyors rely on different graphs of relativity, and the choice has a direct effect on the marriage value calculation.
Once a lease drops below 80 years — see the 80 year rule — half of the uplift created by extending is payable to the freeholder. Because that uplift is itself derived from the other assumptions, small changes upstream produce large swings here.
Negotiation between surveyors
The freeholder's surveyor typically starts at the higher end of the defensible range; the leaseholder's surveyor typically starts at the lower end. Most extensions settle somewhere between those two starting positions — which is why the initial quote is rarely the final figure.
Why tribunal comparisons matter more than averages
Headline averages for lease extension costs can be misleading. Every property is different — lease length, ground rent structure, location, valuation assumptions and market conditions all pull the premium in different directions. An "average" figure blends all of that variation into a single number that rarely describes any real situation accurately.
LeaseIntel focuses on comparable tribunal decisions rather than blended averages. That means your quote is measured against the range of outcomes actually awarded by independent panels for properties with broadly similar lease lengths, values and locations — a much more relevant reference point when deciding whether to accept, negotiate or challenge.
Frequently asked questions
Before you respond to your freeholder
If you have received a lease extension quote, the most useful next step is not necessarily to commission a surveyor immediately. It is to understand whether the quote is in the right territory.
A LeaseIntel benchmark compares your quoted premium against comparable First-tier Tribunal decisions — matched by lease length, property value and location. It tells you whether your quote is Typical, Above Typical or Well Above Typical relative to real tribunal outcomes.
That information costs £89 and takes under a minute. It helps you decide whether the quote warrants acceptance, negotiation or professional challenge — before spending £1,500 on a surveyor you may not need.
Is My Lease Extension Quote Too High?Independent · Not a valuation or legal advice · Tribunal outcomes, not formula estimates