When you own a flat, you own a lease that gives you the right to live there for a set number of years. As those years tick down, the lease gets shorter. To protect the value of your property, you will eventually need to extend that lease. When you do this, you must pay a price to the freeholder, which is known as the premium.
This premium is not a random figure chosen by the freeholder. It is set by a statutory calculation based on the property market and the exact length of your lease. A lease extension valuation is a specialist report that estimates what this premium should be. You hire a surveyor or valuer to calculate the figure before you start the formal legal process.
Having this valuation means you know what a fair price looks like. It allows your solicitor to make a sensible first offer in the legal notice they serve on the freeholder. It also gives you the evidence you need to respond when the freeholder comes back with their own, usually higher, figure.
Having your own independent valuation also gives you something to measure any informal offer against. Ask your solicitor to explain how the statutory route compares before you accept anything.
Why the length of your lease matters
The exact number of years left on your lease is the most important factor in the whole process. You can request an extension at any point, but the law treats leases very differently once they drop below a certain length. According to official guidance, costs rise sharply once 80 years or less remain on the lease.
Under the current rules for flats, you can add 90 years to what is left on your lease. This extension is granted at a peppercorn rent, which is a legal term meaning it reduces your ground rent to zero for the rest of the term. Because you are gaining a much longer lease and wiping out the ground rent, the freeholder loses out on future income. The premium you pay compensates them for that loss.
The shorter the lease, the higher the premium you will have to pay. As the years drop away, the cost of buying those extra 90 years climbs, and it rises sharply once 80 years or less remain. That is why it is worth checking your lease length early.
How marriage value affects the premium
The sharp rise in costs at the 80-year mark is caused by a legal concept called marriage value. Marriage value may be payable to the freeholder if fewer than 80 years remain on your lease .
In simple terms, marriage value is 50% of the increase in the property's combined leasehold and freehold market value caused by the extension. When you extend a short lease, the flat instantly becomes more valuable and easier to sell. The law says that this jump in value is created by joining, or marrying, the freeholder's interests with yours. The valuer calculates this figure as part of the premium.
This extra charge is part of the premium, which is why costs rise sharply once 80 years or less remain.
The table below is an illustration only for a property worth £200,000 with a £100 ground rent.
|
Lease length remaining |
Expected premium |
|---|---|
|
Just one day over 80 years |
£6,500 |
|
Below 80 years |
£13,000 |
These figures are an illustration only, not a quote, and local quotes will differ based on your exact property and location.
What a surveyor does for a lease extension
When you instruct a surveyor to provide a lease extension valuation, they follow a strict evidence-based process. They are not looking for damp, cracked walls or broken boilers. In fact, an inspection of the property is often unnecessary because the physical condition is disregarded in the statutory calculation.
Instead, the valuer spends their time doing detailed desk research to establish the true market value of the flat. They gather evidence that will stand up to scrutiny if the freeholder challenges the figure. The valuer will typically carry out these tasks:
- Review the official Land Registry plans and title documents for your flat.
- Analyse recent marketing data and sold prices for similar flats in your immediate local area.
- Check sales of similar short-lease properties, which is vital evidence if your lease has already dropped under 80 years.
- Prepare the calculation that sets out how the premium is reached.
- Deliver a comprehensive report that states the expected premium and provides the supporting evidence for it.
A crucial rule in lease extension valuations is that any improvements made by current or previous leaseholders must be disregarded in the calculation. If you or the previous owner spent thousands of pounds fitting a high-end kitchen, installing central heating or upgrading the bathroom, the valuer will ignore those upgrades. They value the flat in a basic, unimproved state.
This protects you from paying a higher premium to the freeholder just because you have invested your own money into improving the property. The valuer assesses the flat as it is, ignoring those improvements.
Who pays which costs
Extending a lease is a legal transaction that involves several professionals, and the costs can add up quickly. It is important to budget for all the fees involved, not just the premium you will pay to the freeholder. Under the rules for lease extensions, you are responsible for paying your own professional fees and the freeholder's reasonable costs.
You will need to budget for these separate charges:
- Your own valuation fee, paid to your surveyor for calculating the premium.
- Your own solicitor's fees for preparing the notice, handling the legal transfer and advising you.
- The freeholder's reasonable valuation fees, as they will hire their own surveyor to check your figures.
- The freeholder's reasonable legal fees for processing the notice and drafting the new lease document.
The law states that the freeholder's costs must be reasonable. Ask your solicitor to explain which of the freeholder's costs you are expected to pay.
You must also be prepared to pay a deposit early in the process. For flats, the freeholder can ask for a deposit of £250 or 10% of the cost of the proposed new lease, whichever is greater. Your solicitor will explain when it is due and how it is paid.
How the negotiation and tribunal route works
The process of agreeing the premium follows a strict legal timetable. It begins when your solicitor serves a formal notice on the freeholder. This document states your legal right to extend the lease and puts forward your opening financial offer, which is based directly on the figure in your surveyor's valuation report.
Once the notice is served, the freeholder has a set period to respond with a counter-notice. The freeholder may put forward a different premium, and the two sides can then negotiate to try to agree a price.
If you cannot agree a price through negotiation, the law provides a way to break the deadlock. The formal steps are:
- Your solicitor serves the initial notice with your proposed premium.
- The freeholder serves a counter-notice with their higher premium.
- The two valuers attempt to negotiate a settlement based on their market evidence.
- If still unresolved, you can apply to a leasehold tribunal.
- The tribunal reviews the evidence from both sides and decides the final price.
Applying to a leasehold tribunal should be viewed as a last resort. It adds significant delays to the process and incurs extra legal and valuation fees for your side, as your professionals will need to prepare for and attend the hearing. Agreeing a price before that stage avoids those extra costs.
What the leasehold reforms have changed so far
Leasehold law in England is going through a transition. The Leasehold and Freehold Reform Act 2024 is now law, and it has already introduced some important changes for flat owners, with more expected to follow.
The most significant change to take effect so far relates to how long you must own a flat before you can extend the lease. Since 31 January 2025, you no longer need to have lived in the property for two years to extend. Flat leaseholders can extend immediately after taking ownership of the lease. This matters if you are buying a flat with a short lease.
The legislation also contains proposals that could change the costs and terms of extending a lease. The Bill proposes a 990-year extension at a peppercorn rent, replacing the current 90-year extension. It also proposes removing marriage value.
However, these specific financial changes need secondary legislation to take effect. They are not yet in force as at June 2026 per Which?. Because the timeline for secondary legislation can be unpredictable, you must check GOV.UK or the Leasehold Advisory Service for the current position before you make any decisions. You should base your plans on the rules that are in force today rather than waiting for unconfirmed dates.
Choosing a valuer for a lease extension
Because the premium is set by a rigid statutory formula, you need a professional who understands leasehold legislation and has access to accurate local sales data. A valuation report gives you evidence to use when you respond to the freeholder's figure.
You should instruct a RICS registered valuer or a specialist leasehold surveyor to carry out the work. Ask any valuer you are considering whether they handle lease extensions regularly. You can read more about when you need an RICS valuation for other property matters, but for a lease extension, it is essential.
When you are ready to proceed, contact two or three specialist firms and ask for written quotes for a lease extension valuation. Ensure the quotes cover the same service, including the desk research, the formal report and any help with negotiating with the freeholder later in the process.
Common questions
Can I use an online calculator instead of a surveyor?
GOV.UK points to the Leasehold Advisory Service calculator as a guide to the costs for a flat. This tool is excellent for getting a rough idea of the premium so you can decide whether to proceed. However, it is not formal evidence. You will still need a professional valuation report to back up the legal notice your solicitor serves on the freeholder.
Does the valuer need to visit my flat?
An inspection is often unnecessary because the physical condition of the property is disregarded in the calculation. The surveyor will base their figures on Land Registry plans, recent marketing data and evidence of short-lease sales in your area.
What happens to improvements I have made?
Any improvements made by current or previous leaseholders must be disregarded in the calculation. You do not pay a higher premium just because you have installed a new kitchen, upgraded the bathroom or laid premium flooring. The valuer assesses the flat as if those improvements had not happened, which keeps the premium tied strictly to the lease length and basic market value.
Do I need a solicitor as well as a surveyor?
Yes, you will need a solicitor to handle the legal side of the lease extension. Your solicitor prepares the formal notice and advises you on the legal steps, including the deposit. Surveyors provide the valuation figure and handle the financial negotiation, but they do not give legal advice on contracts or notices.
Can I extend my lease as soon as I buy a flat?
Yes, under the latest rules you can. Since 31 January 2025, the requirement to have lived in the property for two years has been removed. You can now start the formal lease extension process immediately after taking ownership of the lease, which matters if you are buying a flat with a short lease.
Your next steps
Extending a flat lease involves coordinating a surveyor, a solicitor and the freeholder. To keep the process moving smoothly and avoid unnecessary delays, follow these steps:
- Check the exact number of years remaining on your lease by reading your title document or asking your solicitor.
- Use the Leasehold Advisory Service calculator to get a rough idea of the premium before you commit to professional fees.
- Check GOV.UK for the latest updates on the Leasehold and Freehold Reform Act 2024 to see which rules are currently in force.
- Get two or three written quotes from a RICS registered valuer or specialist leasehold surveyor.
- Instruct a solicitor who specialises in leasehold enfranchisement to prepare the formal notice.
- Ensure you have the funds ready to cover the premium, your own professional fees, the freeholder's reasonable costs and the initial deposit.
Once you have your valuation report and your funds in place, you are ready to start the legal process and secure the future value of your home. If you are looking for a qualified professional to calculate your premium, you can find a surveyor near you to get started.
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