If you own a leasehold property and your lease term is running down, extending it can be one of the smartest financial decisions you’ll make.
At the start of the process is the first crucial step that provides full transparency of your likely lease extension cost — the lease extension valuation.
Many leaseholders find this part confusing, especially if they’ve never gone through it before. In this guide, we’ll break down exactly what a valuation is, why it’s needed, and how it helps you secure a fair, accurate price for your lease extension.
Understanding a Leasehold Valuation
A lease extension valuation is the outcome of a series of calculations, comparables, and qualitative analysis specific to your property and existing lease to determine the lowest amount you’ll need to pay your freeholder to extend the lease on your property.
At LEC, this work is undertaken by a leading qualified RICS-regulated ALEP surveyor who specialises in leasehold properties and understands the detailed legal and financial principles behind leasehold valuation.
The surveyor’s job includes the crucial estimation of the “premium” — the amount you pay to the freeholder — based on several key factors:
- Property value: What your flat or house is worth on the open market.
- Unexpired lease term: How many years remain on your lease.
- Ground rent: The amount you currently pay each year.
- Marriage value: The increase in your property’s value once the lease is extended (if your lease is below 80 years).
- Relativity: The difference between the value of your property with a short lease versus a long one.
- Qualitative analysis: Comparable lease extensions, the surveyor’s experience of the freeholder, any recent cases, and relevant legal outcomes.
By analysing and compiling these elements, the surveyor produces a report showing the likely premium range — the lowest and highest amounts you could expect to pay for your premium.
Why an Accurate Valuation Matters
When you extend your lease using the statutory process under the Leasehold Reform, Housing and Urban Development Act 1993, the first formal step is serving a Section 42 Notice on your freeholder.
This notice must include the premium you’re offering to pay, and that figure must be supported by a professional valuation. If you guess or rely on an informal estimate, you could face problems later on:
Too low, and your freeholder may try to reject your offer outright.
Too high, and you risk paying more than necessary.
An accurate, professional valuation gives you a realistic starting point and ensures you’re negotiating from a position of strength. It also helps your solicitor and surveyor guide you through the process with confidence, avoiding unnecessary disputes or delays.
How LEC Makes Things Simple
At The Lease Extension Company, we know that starting your lease extension can feel overwhelming, especially when unfamiliar terms like marriage value or relativity appear in reports.
That’s why we make things straightforward from day one.
Our specialist surveyors are the leading experts in the country and will:
- Carry out a comprehensive valuation report.
- Explain each part of the calculation in plain English.
- Advise on the right premium figure to include in your Section 42 Notice.
Once your valuation is complete, our expert team handles the entire process — from our specialist solicitors serving the S42 notice, validating and responding to the S45 counter notice, agreeing the terms, approving the draft lease, and completing your lease extension.
We’ll keep you fully informed, so you always know what’s happening and what each step means. With our fixed-fee service, there are no hidden surprises. Just clear, transparent pricing and reliable leasehold advice from start to finish.
When Should You Get Your Lease Extension Valuation?
If your lease has around 90 years or fewer remaining, it’s time to start planning your extension.
Once your term drops below 80 years, marriage value becomes payable — significantly increasing the premium you’ll owe your freeholder.
Acting early means you can:
✅ Avoid marriage value costs
✅ Preserve your property’s resale value
✅ Keep your extension costs lower and predictable
Getting a valuation early helps you make informed decisions and plan your finances before the lease term drops too far.
To get an estimation of your likely premium, use our helpful free online calculator (PLEASE ADD IN LINK TO THE CALCULATOR).
Please note that our calculator will give you a general estimate of the premium for a lease extension and is based on data available on a national level. It does not take into account local factors, comparables and other elements that may impact the premium and can only be achieved via a professional specialist valuation.
Key Takeaway
A lease extension valuation is much more than just numbers. It’s the foundation for a smooth, stress-free lease extension and ensures you pay the lowest amount possible for your lease.
With our professional advice, you can save thousands of pounds and avoid unnecessary complications.
If you’re unsure how much your lease extension might cost, or when to begin, our team is here to help.
Speak with a Lease Extension Specialist Today
Arrange an appointment with our team of specialist lease extension experts and solicitors. We’ll help you identify the best route for you and your circumstances before you invest time and funds into this procedure.
Simply fill out our online Contact Form, send us an Email via [email protected] or call us for free on 0800 098 2770.
