Lease Extension Calculator Information
The above figures should give you a reasonably accurate guideline to the likely premium that a Leasehold Valuation Tribunal would calculate using statutory methods. This calculator has been designed, and is maintained by, Ashley Connell - a solicitor with a specialist knowledge of Lease Extensions, with a very deep understanding of valuation methodology.
How is your lease extension cost calculated?
A complex algorithm is used to derive the estimated premium in line with the rules set out by statute, in particular Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993. Modern case law decisions influence this algorithm, and we constantly monitor these decisions and tweak our methods accordingly. You may be interested to know that we are currently using the following variables:
- 5% deferment rate
- 6% capitalisation rate
- Relativity in line with the Zucconi case - see information on relativity for lease extensions.
| Variable | Current default | Basis |
|---|---|---|
| Deferment rate | 5% | Sportelli benchmark |
| Capitalisation rate | 6% | Standard tribunal-accepted rate |
| Relativity | Zucconi graph | Zucconi v Rescigno relativity case |
| Component | Description |
|---|---|
| Ground rent compensation | Present value of ground rent the freeholder loses over the remaining term |
| Reversionary interest | Present value of the freeholder regaining the property at lease expiry |
| Marriage value | Shared uplift in value created by extending, split 50/50, only applicable under 80 years |
Anyone considering extending their lease should obtain a professional Lease Extension Valuation report to assist with negotiations. This report is critical for any person wanting to negotiate the premium.
How to agree on a premium
Freeholders and leaseholders negotiate a premium based on their own valuations. Leaseholders should present their own calculations to the freeholder in a professional report with the aim of negotiating a lower premium. In fact, freeholders expect leaseholders to negotiate. We strongly recommend that you appoint a professional to deal with this aspect. Appoint a solicitor specializing in lease extensions at the very outset; a good solicitor should be able to analyze your valuation report and negotiate on your behalf to achieve the lowest possible premium. See our section on choosing a solicitor.
About our lease extension calculator
Our results reflect a close approximation of the true cost of extending your lease in accordance with the rules, common law cases, and statutory requirements of a valuation. Our calculator adheres to these rules entirely, providing extremely accurate results; however, it does not substitute the need for a professional valuation report. Online calculators are not a basis for negotiation under the statutory lease extension process. We highly recommend that you instruct a solicitor who fully understands the valuation process and is able to negotiate on your behalf.
Disclaimer: We ask our users to not rely on our results; they are provided for guidance only.