Freehold Purchase Cost Calculator
Estimate the premium to buy a freehold or extend a lease, from the discounted reversion, the ground rent income and both sides costs.
💼 Are you a real estate agent or broker? Send this calculator to your buyers on your own branded listing page — every enquiry comes straight to your WhatsApp. Create free agent page →The premium for a freehold or a lease extension compensates the freeholder for two things: the ground rent income they stop receiving, and the property they no longer get back at the end of the term. Both are discounted to today's value.
The arithmetic is straightforward; the contested part is the deferment rate and, where local law applies it, the share of marriage value. Costs on both sides are usually payable by the leaseholder, and they are not small.
What the premium buys
The freeholder loses the ground rent income and the reversion. Both are valued at today money: the reversion is the freehold value discounted over the remaining term, and the rent is an annuity over the same period. Where local law adds marriage value, it is applied on top.
Worked example
A property worth 400,000 freehold with 70 years left, a 5% deferment rate and a 250 ground rent. The reversion is worth 13,146 today and the ground rent income 4,836, giving a premium of 17,982. With 3,500 of legal and valuation costs on both sides, the total is about 21,482.
Act before the lease gets short
The premium rises steeply as the term falls, because the reversion is discounted over fewer years and marriage value frequently begins below a threshold. Extending at 85 years costs a fraction of extending at 65, and the difference is far larger than the delay feels.
Turn a calculation into an enquiry
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Create your free property pageFrequently asked questions
Why does the premium rise so fast on a short lease?
Because the freeholder gets the property back sooner, so the reversion is worth much more today. Discounting is exponential, which is why the cost roughly doubles over each successive stretch of years lost.
What is marriage value?
The increase in total value when the leasehold and freehold interests are combined, which several jurisdictions require the leaseholder to share with the freeholder once the lease falls below a threshold. Where it applies it can be the largest part of the premium.
Do I have a right to buy the freehold?
It depends entirely on local law. Some jurisdictions give leaseholders a statutory right on set terms; in others it is a purely voluntary negotiation. Check what applies before assuming the freeholder must sell.