How Much Will My Lease Extension Cost?

By Jack Pye MRICS on and updated on

If you have less than 85 years remaining on your flat’s lease, you should consider paying for a lease extension urgently. Leave it too late, and your lease extension could become very expensive, and you’ll find it much harder to gain access to funding.

But if you extend your lease too soon, your costs may exceed the increase in the value of your flat.

Even though every case is different, we generally recommend extending your lease when you fall below the 90-year mark. Remember, lease extensions aren’t always straightforward, and a lot of complex factors affect the price you’ll pay.

You could enter into informal negotiations with your freeholder to avoid certain costs, but keeping everything above board means you won’t run any risks or face any nasty surprises. That’s why you should get advice from a local property expert before making any decisions.

At Novello Chartered Surveyors, we have a team of RICS Surveyors that specialise in lease extensions and collective enfranchisement. We can produce accurate valuation reports, liaise with third parties, ensure the process goes smoothly, and make sure you pay a fair price.

Feel free to reach out to us for a no-obligation chat if you’re thinking of extending your lease. Below, we explain the factors that affect the cost and how much you can expect to pay.

Lease extension cost factors at a glance:

  • The freeholder’s loss of ground rent income
  • The leasehold flat’s reversionary value
  • Marriage value
  • Solicitors
  • Surveyors
  • Your freeholder’s reasonable valuation and legal fees
  • Land Registry fees
  • Stamp Duty

Primary factors that affect the cost of a lease extension

Here are the main factors that affect the cost of a lease extension, excluding professional fees:

The freeholder’s loss of ground rent income

When you extend your lease through formal negotiations, you’ll likely stop paying ground rent, which means your leaseholder will lose a source of income. Consequently, the cost of your lease extension will take into account your landlord’s losses. You’ll essentially have to compensate your freeholder for the loss of their ground rent over the term of your current lease.

When calculating your freeholder’s losses, you need to consider more than just the ground rent you currently pay. In most cases, leases contain provisions that allow your freeholder to increase your ground rent over time. Or, your ground rent may be linked to your flat’s value as a percentage. You’ll need a Surveyor to determine your freeholder’s ground rent losses, which will be added to the total cost of your lease extension.

The leasehold flat’s reversionary value

When a lease expires, the flat reverts to the freeholder, which they are then free to lease to another tenant. This means that your freeholder has a vested ‘future interest’ in your flat. When you extend your lease – which is typically by 90 years – your freeholder loses the ability to find new tenants, meaning they incur further financial losses. Again, you’ll have to compensate your freeholder for these losses (the reversionary value) when you extend your lease.

A Surveyor will assess your flat’s current value with a Long Lease and apply a ‘deferment rate’, which is an annual discount applied to your flat’s capital value with regards to the time remaining on your lease. The deferment rate for flats is generally 5%. or more specific advice and negotiating tips please speak to our property experts.

Your flat’s reversionary value is added to the ground rent compensation figure to calculate the cost of your lease extension.

Marriage value

You’ll only pay a marriage value if you extend a lease with 80 years or less remaining, so you can skip this section if it doesn’t apply to you.

The marriage value refers to how much your flat’s value will increase as a result of extending your lease. The increase in value is compared to your flat’s current value, and your freeholder is entitled to half of the difference.

Remember that flats with short leases can increase in value dramatically following a lease extension. The larger the increase, the more you’ll need to pay to your freeholder. That’s why you should avoid letting your lease fall below 80 years. If you have 90 years or less remaining, now’s the time to take action. If you wait too long to extend your lease, the marriage value could be higher than both the ground rent compensation figure and your flat’s reversionary value combined.

Additional lease extension costs

In the previous section, we discussed the primary factors that affect how much you’ll pay for a lease extension. But besides the cost of your lease extension, you’ll also need to cover professional fees. Entering into informal negotiations to extend your lease is an option, but if you don’t want to take risks with your finances and future, you’ll likely need to pay for:


You’ll need a legal expert to negotiate with your freeholder and their legal representatives. It’s crucial to let a qualified professional go through the paperwork with a fine-toothed comb and make sure everything is above board. If you can’t reach an agreement with your freeholder, you may need a solicitor to represent you in a tribunal.


Obtaining an impartial lease extension valuation from a RICS Chartered Surveyor is crucial. They can make sure you comply with the relevant regulations as set out in the Commonhold and Leasehold Reform Act 2002, but the benefits of valuations extend far beyond that.

A surveyor’s top priority is to make sure you pay a fair price for your lease extension. They’ll calculate the cost of your extension based on worst- and best-case scenarios. They can also walk you through the process, remove any confusion, liaise with your freeholder’s Surveyor, and work alongside your Solicitor. If necessary, they can also provide support should you need to take your freeholder to a tribunal.

If you want to learn more about how RICS Chartered Surveyors can help you protect your investment, don’t hesitate to give us a call.

Your freeholder’s reasonable valuation and legal fees

You’ll be responsible for covering your freeholder’s valuation and legal fees. And, your freeholder is free to hire any professional they like, meaning you won’t have full control over the costs. However, if you feel your freeholder’s fees are unreasonable, you can apply to a tribunal, but be aware that doing so can cost thousands of pounds. Before you take any action, contact an impartial Surveyor or Solicitor.

Land Registry fees

You’ll only need to pay Land Registry fees if you intend to register your flat under a new name.

Typical Land Registry fees are as follows:

Flat ValueLand Registry fee
£80,001 to £100,000£80
£100,001 to £200,000£190
£200,001 to £500,000£270
£500,001 to £1,000,000£540

Stamp Duty

Stamp Duty applies to lease extensions in the same way as a typical property purchase. However, it is only applied to flats where the extension price exceeds £125,000 (if the flat is not your primary residence, you’ll be subject to a higher rate of Stamp Duty). If you think you may need to pay Stamp Duty, you can get an idea of the costs using this calculator.

Typical Lease Extension Costs

The cost of lease extensions can vary wildly, especially considering the number of variables included in the calculation. The most straightforward way to get an accurate insight into how much you’ll pay is to call our Surveyors for an impartial lease extension report.

The length remaining on your lease plays a crucial role in determining your lease extension cost. According to the Leasehold Advisory Service, here’s what you can expect to pay for a 90-year lease extension on a flat valued at £200,000:

Time Remaining on LeaseExtension CostProfessional FeesPotential Added Value
95 years£5,000£2,500£5,000
85 years£6,000£2,500£10,000
79 years£8,500£2,500£16,000
70 years£14,000£2,500£26,000
60 years£24,000£2,500£38,000

As you can see, the cost of a lease extension starts to skyrocket when your lease has less than 85 years remaining. But it’s not always worth extending your lease too early. Getting the timing right is key to maximising your return on investment.

Please remember that the figures mentioned above are just guidelines, and costs can vary dramatically. For an accurate lease extension cost estimate, get in touch with our property experts.

Use our free online leasehold extension calculator

At Novello, we’ve created a free online lease extension calculator that you can use to get an estimate of the cost of your extension. It’s a handy tool for initial consideration purposes, but it shouldn’t be taken as fact or used as a substitute for a professional valuation.

Our accurate and impartial lease extension valuations are available from just a few hundred pounds. You’ll need one to enter into formal negotiations with your leaseholder. If required, you can also use it as evidence if you need to attend a tribunal.

Our RICS Chartered Surveyors work on a mobile basis, so you don’t need to visit any offices or cover transport fees for expert advice. If you want to partner with a reliable and experienced property specialist to get the ball rolling, we hope to hear from you. Give us a call, and we’ll discuss your online estimate in more detail.

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