Compare a freeholder’s offer with a section 42 extension over 20, 30 or 50 years.
Enter your freeholder’s informal offer and compare its real cost, over the period you choose, with a statutory section 42 extension.
| Informal offer | Statutory (section 42) |
|---|
Many freeholders send leaseholders an informal offer: a premium for a longer lease, often with a new ground rent. It can look cheaper than a statutory extension, but the price is only one part of the cost. This tool compares the two routes over a period you choose.
Cash is not the whole story. An informal lease that is shorter than the statutory 90-year addition, or that keeps a ground rent, may be cheaper today but harder to sell or remortgage later. The tool lists those factors under the result so you can see what the cash figure leaves out.
The examples compare four informal offers with a statutory extension on a £400,000 flat with 74 years left and £200 ground rent. The statutory premium is about £29,719 before fees of £4,000 to £8,000, and the lease would run for 164 years with no ground rent.
| Informal offer | Premium | New lease length | Ground rent paid over 20 years | Ground rent in year 20 | Premium plus 20 years’ rent |
|---|---|---|---|---|---|
| £12,000 for 99 years, then £250 doubling every 25 years | £12,000 | 99 years | £5,000 | £250/yr | £17,000 |
| £12,000 for 99 years, £250 fixed | £12,000 | 99 years | £5,000 | £250/yr | £17,000 |
| £20,000 for 189 years, peppercorn | £20,000 | 189 years | £0 | £0/yr | £20,000 |
| £12,000 for 99 years, £250 doubling every 10 years | £12,000 | 99 years | £7,500 | £500/yr | £19,500 |
| Informal offer | Premium plus 50 years’ rent | Ground rent in year 50 |
|---|---|---|
| £12,000 for 99 years, then £250 doubling every 25 years | £30,750 | £500/yr |
| £12,000 for 99 years, £250 fixed | £24,500 | £250/yr |
| £20,000 for 189 years, peppercorn | £20,000 | £0/yr |
| £12,000 for 99 years, £250 doubling every 10 years | £89,500 | £4,000/yr |
Offers are examples, not quotes. Notice how the rent doubling every 10 years overtakes the saving: the premium looks small, but the rent keeps rising for the life of the lease.
Sources
Related guides
It can be cheaper in cash, but it is not always better value. Informal deals may give a shorter lease, keep a ground rent, or rely on the freeholder’s own formula. Compare the lease length and ground rent as well as the price.
A statutory extension under the 1993 Act is a legal right: 90 years added, ground rent reduced to zero and a premium set by a formula. An informal extension is a voluntary agreement on whatever terms you and the freeholder accept.
A freeholder can propose it in an informal deal, but you do not have to accept. Doubling or rising ground rent can make the flat hard to mortgage, so compare the long-term cost before agreeing.
Serving the notice fixes your valuation date and keeps your statutory rights, and you can still reach an agreement afterwards. Take advice from a leasehold solicitor on the costs, because serving a notice makes you liable for the landlord’s reasonable costs.
With the 5% deferment rate from Sportelli, a published relativity set, and 50% of marriage value if 80 years or fewer remain. It is an estimate, not a valuation.
This calculator was built and is maintained by Rahul Tandon, an independent web developer and researcher. It applies published statutory rules and the 5% Sportelli deferment rate, and every assumption is shown on this page. The formulas and limits are on the methodology page; see our editorial policy. LeaseVault is not a law firm, a surveying practice or a mortgage broker, and the result is an estimate for initial budgeting, not legal, financial or valuation advice.
We’ll notify you when 2024 Act provisions come into force and when new premium rates are confirmed.