Lease Extension Valuation

Marriage value is the increase in property value resulting from the lease extension — the difference between the value of the flat with the existing short lease and its value with the extended lease. Under the 1993 Act, where the unexpired term is below 80 years, the freeholder is entitled to 50% of this marriage value. This can add tens of thousands of pounds (or more) to the premium. Above 80 years, marriage value is zero. This is the single most important reason not to delay extending your lease when it approaches — or falls below — 80 years: you will pay significantly more. For example, a flat worth GBP 300,000 with 82 years on the lease might command a premium of, say, GBP 8,000-GBP 12,000. The same flat with 78 years remaining might command a premium of GBP 15,000-GBP 20,000 or more — the additional amount being marriage value.

The statutory route (Section 42 Notice under the 1993 Act) is a formal legal process that gives you the right to a 90-year extension at a peppercorn rent, on the terms set out in the Act. The freeholder cannot refuse (provided you qualify), and if you cannot agree on the premium, the First-tier Tribunal (Property Chamber) will determine it. The downside is that the process can be slow (6-12 months), you are liable for both your own and the freeholder's reasonable legal and valuation costs, and a premium determined by the tribunal may be higher (or lower) than expected. The informal route is a voluntary negotiation with the freeholder — it can be quicker and cheaper, but the freeholder is not obliged to agree, can set their own terms (including a new ground rent), and there is no tribunal fallback. We can advise on which route is more appropriate in your circumstances.

The total cost comprises three elements: (1) the premium paid to the freeholder (our valuation calculates this); (2) your own legal and valuation costs; and (3) under the statutory route, the freeholder's reasonable legal and valuation costs, which you are liable to pay. The premium varies significantly depending on the unexpired term, the ground rent, the property's value and whether marriage value applies. The shorter the lease, the higher the premium. The higher the ground rent, the higher the premium. The more valuable the property, the higher the premium. We can provide a realistic estimate of the premium at the quote stage so you can budget before committing to the process.

Yes — a Section 42 Notice must include the premium you propose to pay. That figure must be based on a professional valuation, because if the matter proceeds to the tribunal and your proposed premium is found to be unrealistic, the tribunal may take that into account on costs. The notice figure is your opening negotiating position — it should be realistic, evidence-based and supported by professional calculations. Our report provides the premium calculation you need for the Section 42 Notice, including the capitalised ground rent, reversion value and marriage value (if applicable).

The statutory right to a lease extension under the 1993 Act requires that you have been the registered proprietor of the lease for at least 2 years at the date of the Section 42 Notice. If you have owned for less than 2 years, you cannot (yet) use the statutory route. However, you can still negotiate an informal extension with the freeholder — the freeholder may agree to extend voluntarily. Some sellers also start the statutory process before selling and assign the benefit of the notice to the buyer on completion — your solicitor can advise on this. We can value the premium for either route.

Under the statutory route, if you cannot agree on the premium within the statutory timescales (typically 2-6 months from the date of the Section 42 Notice), either party can apply to the First-tier Tribunal (Property Chamber) for a determination. The tribunal will consider the valuation evidence from both sides and determine the appropriate premium. The tribunal's decision is binding (subject to appeal on a point of law). Our report is prepared with tribunal proceedings in mind — the reasoning, comparable evidence and calculations are set out clearly so the tribunal can follow them. If you proceed informally and cannot agree, you have no right to apply to the tribunal, but you can serve a Section 42 Notice to trigger the statutory process (assuming you qualify).

Under the statutory route, the process from service of the Section 42 Notice to completion typically takes 6-12 months, depending on whether the premium is agreed or determined by the tribunal. An informal extension can be quicker — potentially 2-4 months if negotiations proceed smoothly. In either case, the valuation itself (our report) takes 5-10 working days from instruction. We recommend starting early — particularly if your lease is approaching the 80-year threshold — as delays can be costly.

The cost depends on the property type, value, location and the complexity of the lease. We provide a fixed-price quote within 24 hours of your enquiry — the price we quote is the price you pay, with no hidden extras and no VAT added to our fees. The cost of the valuation is a small fraction of the premium you will pay for the lease extension — and an accurate, professionally prepared valuation can save you far more than its cost by ensuring the premium is correctly calculated and you are not overpaying. We cover all seven counties: Bedfordshire, Buckinghamshire, Cambridgeshire, Hertfordshire, Northamptonshire, Greater London and Oxfordshire.