One of the most important — and often misunderstood — aspects of lease extension is marriage value. It can significantly increase the cost of extending your lease, especially if your lease has dropped below 80 years. Understanding marriage value is essential for making informed decisions and avoiding unnecessary costs.
This guide will walk you through what marriage value is, how it’s calculated, when it applies, and how to avoid it. If you’re a leaseholder thinking about extending your lease, this is a concept you simply can’t afford to ignore.
What Is Marriage Value?
Marriage value refers to the increase in the total value of a property when a lease is extended. It’s based on the idea that the combined value of the extended lease and the freeholder’s interest is more than the sum of their separate parts.
In practical terms, marriage value is:
- The additional market value created when the lease is extended
- A valuation concept relevant under the Leasehold Reform, Housing and Urban Development Act 1993
- Shared 50/50 between leaseholder and freeholder once the lease drops below 80 years
When Does Marriage Value Apply?
Marriage value only becomes payable once your lease falls below 80 years. This threshold is critical — and well known to surveyors, solicitors, and freeholders.
If your lease has:
- More than 80 years remaining → No marriage value is payable
- 80 years or fewer → Marriage value is payable as part of the premium
This is why many leaseholders aim to extend their lease before it hits 80 years — to avoid this costly addition.
Why Is It Called “Marriage” Value?
Think of it like this: the leaseholder’s interest and the freeholder’s interest are two separate assets. When the lease is extended, these two interests “marry” into a more valuable, unified asset — hence the term “marriage value.”
The leaseholder gets a longer lease and no ground rent, while the freeholder loses the right to receive ground rent and to reclaim the property when the lease ends. As compensation, the freeholder is entitled to 50% of the uplift in value.
How Is Marriage Value Calculated?
The calculation is complex and requires professional valuation. But here’s the basic idea:
- Calculate the value of the flat with the current (short) lease
- Calculate the value of the flat after the lease is extended (90 extra years, no ground rent)
- Calculate the value of the freeholders current investment interest in the flat (the value of the reversion and the value of the ground rent once capitalised)
- Subtract the current value from the extended value, then deduct the freeholders investment interest in the flat
- The difference is the marriage value
- 50% of that amount is added to the premium payable to the freeholder
Does Marriage Value Apply Under Informal Lease Extensions?
Yes — although the 50/50 split is a statutory rule, freeholders often factor marriage value into their informal (voluntary) lease extension offers, especially if the lease is near or below 80 years.
Since informal offers are not governed by statutory protections, freeholders can:
- Propose higher premiums
- Include marriage value in full
- Offer worse terms (like continued ground rent)
This is another reason why the statutory lease extension route is recommended — it ensures marriage value is fairly calculated and capped at 50%.
Can I Avoid Paying Marriage Value?
Yes — but only by acting early. Here’s how:
- Extend your lease before it drops below 80 years
- Monitor your lease term carefully
- Seek a valuation if your lease is approaching the threshold
If your lease is already below 80 years, marriage value is unavoidable under current law — but acting promptly can still reduce the overall premium.
Has Marriage Value Been Abolished?
No. Despite proposals and speculation around leasehold reform, marriage value has not been abolished. As of now:
- It remains a core part of lease extension premium calculations
- The 80-year threshold still applies
- Leaseholders must factor it into costs
Any future legislative changes may affect this, but you should not delay in the hope of reform particularly if your lease is just over the threshold or equally if it prevents you from taking your next steps. This is because there are no current guarantees that possible future reform will be of benefit – when legislation does come through – there are likely to be winners and losers.
FAQs
What happens if my lease is at exactly 80 years?
Marriage value does not apply at exactly 80 years — but will be payable the day it falls to 79 years and 364 days. Time is critical.
Can I negotiate marriage value down?
No — under the statutory route, it’s legally fixed at 50%. The only way to avoid it is to extend early.
Does marriage value apply to houses?
Yes, if you’re extending a lease on a leasehold house under statutory rules.
Can the Tribunal determine the marriage value?
Yes. If you and your freeholder can’t agree on the valuation, the First-tier Tribunal can step in to determine a fair amount, including the marriage value.
Summary: Key Takeaways
| Factor | Impact |
| Marriage value applies | Once lease < 80 years |
| Statutory entitlement | Freeholder receives 50% of uplift |
| Can be avoided | Yes — by extending early |
| Included in informal offers? | Often — and sometimes unfairly |
| Abolished? | ❌ No — still in force |
Ready to Extend Your Lease and Avoid Marriage Value?
If your lease is nearing the 80-year mark, now is the time to act. At Extension.Lease, we help leaseholders calculate the right premium, avoid unnecessary costs, and secure long-term property value.
