Extending your lease can add significant value to your property, often running into tens of thousands of pounds. In many cases, the uplift in value can outweigh the cost of extending, making it one of the most effective ways to protect and grow your property investment.
The amount of added value depends on several key factors, but the impact is especially noticeable when your lease is approaching or has dropped below 80 years unexpired. Here’s why:
🔑 Why the 80-year threshold matters
Once a lease falls under 80 years, a calculation called “marriage value” becomes payable as part of the premium. This means you must share with the freeholder part of the extra value that the extension creates. As a result:
- The cost of extending rises sharply.
- The value added after extension is typically greater, because you are turning a “short lease” flat — often difficult to sell or mortgage — into a property with a long, attractive lease.
For this reason, many buyers and mortgage lenders view a flat with fewer than 80 years as a liability, while a newly extended lease makes the property far more marketable.
📈 How much value can be added?
Although the exact figures vary depending on property type and location, extending a lease typically increases a flat’s value by 10–20% compared with its short lease value. This is for a lease that has around 75-80 years unexpired. If your lease has 50 years remaining, it will be worth only around 75% of its full market value.
- In prime areas such as London, the difference can amount to tens of thousands of pounds, and in some cases over £100,000.
- Even outside London, the uplift can still be highly significant, often adding more than the cost of the premium itself.
- For higher-value flats, the return on investment from a lease extension can be especially attractive.
🏠 Other financial benefits of extending your lease
- Improved mortgageability:
Many lenders refuse to mortgage flats with short leases, particularly under 70 years. By extending, you open your property up to the full mortgage market, increasing buyer demand. - Enhanced saleability:
A flat with a long lease is easier to sell, attracts more buyers, and avoids price “chips” during conveyancing negotiations. - Peace of mind and security:
Extending resets your lease term (usually by 90 years added to the existing term under the statutory route) and reduces ground rent to a “peppercorn” (effectively nil). This protects your property’s long-term value.
📍 Factors that influence the uplift in value
The precise amount of value added depends on:
- Current lease length — the shorter it is, the bigger the uplift after extension.
- Location — high-value areas see a greater absolute increase.
- Property type and condition — desirable flats in sought-after buildings command stronger premiums.
- Ground rent terms — leases with onerous ground rents tend to benefit more from an extension.
✅ Conclusion: A lease extension is an investment
Extending your lease is not just about compliance — it’s about protecting and enhancing the long-term value of your home. For many leaseholders, the value added after extending exceeds the cost of the premium and fees, meaning the extension more than pays for itself over time.
At extension.lease, our surveyors and solicitors can provide a detailed valuation showing:
- The likely premium payable to extend your lease.
- The estimated uplift in your property’s value.
- A full picture of the costs and benefits so you can make an informed decision.
Find out how much value a lease extension could add to your property — our surveyors can provide a tailored valuation to help you make the right decision.
