How Much Does a Lease Extension Cost? A Practical Guide for Leaseholders
One of the first questions leaseholders ask is simple:
How much will it cost to extend my lease?
The answer depends on several factors, but understanding how the premium is calculated and what additional costs are involved can help you plan ahead and avoid overpaying.
The Cost of a Lease Extension: What You’re Paying For
When extending your lease under the statutory process, the main cost is the premium payable to the freeholder.
This reflects the compensation due to the landlord for:
Loss of ground rent
Delay in receiving the property back (reversion)
Any increase in value created by the lease extension
This is not a fixed fee — it is a valuation-based figure.
Key Factors That Affect the Cost
1. Lease Length
This is the biggest driver of cost.
90+ years remaining → relatively low premium
80–90 years → moderate increase
Below 80 years → significant increase due to marriage value
2. Property Value
The higher the value of your flat, the higher the premium.
A £300,000 flat and a £900,000 flat will have very different extension costs, even with identical lease lengths.
3. Ground Rent
Higher ground rents increase the premium payable.
This is particularly relevant for newer leases with escalating ground rent provisions.
4. Marriage Value (Below 80 Years)
Once your lease falls below 80 years:
👉 The freeholder becomes entitled to 50% of the increase in value created by the lease extension.
This can add thousands — sometimes tens of thousands — to the cost.
Typical Cost Ranges (Guide Only)
While every case is different, as a broad guide:
90+ years remaining → £5,000 – £15,000
80–90 years → £10,000 – £25,000
70–80 years → £20,000 – £50,000+
Below 70 years → significantly higher
These figures vary depending on property value and location, but they illustrate how quickly costs can rise.
Additional Costs to Budget For
The premium is not the only cost.
Leaseholders should also allow for:
1. Valuation Fees
A specialist valuation is essential to determine the correct premium.
2. Legal Fees
You will need a solicitor to handle the legal process.
3. Freeholder’s Costs
Under the legislation, you are typically responsible for the freeholder’s:
Legal fees
Valuation fees
(But not their negotiation costs)
Can You Negotiate the Price?
Yes — and this is where many leaseholders either save or lose money.
The freeholder’s initial figure is rarely the final figure
Valuation inputs can vary
Negotiation strategy is key
Without professional advice, leaseholders risk agreeing to a premium above market level.
How Much Can You Save by Acting Early?
Timing is critical.
For example:
Extending at 82 years may cost significantly less than at 78 years
Waiting just a few years can add substantial cost
In many cases, acting early can save more than the cost of professional fees.
Why Online Estimates Can Be Misleading
Online calculators can give a rough guide, but they often:
Use generic assumptions
Don’t reflect local market evidence
Ignore negotiation dynamics
A professional valuation provides a far more accurate and reliable figure.
How Olden Property Can Help
At Olden Property, we provide:
RICS-compliant lease extension valuations
Clear advice on likely premium ranges
Negotiation support with freeholders
Strategic advice on timing
Our focus is ensuring leaseholders do not overpay.
The cost of a lease extension depends on multiple factors, but one thing is consistent: The longer you wait, the more it is likely to cost.
Understanding your position early allows you to make informed decisions and avoid unnecessary expense.
Speak to Olden Property
If you would like to understand how much it may cost to extend your lease, we can provide clear, independent advice tailored to your property.