What is marriage value?

Marriage value is a valuation concept that trips up many leaseholders, but the idea behind it is simple. If you value a short lease on its own, and value the freeholder's interest on its own, and add the two together, the total comes to less than the value of a single long lease. Extending the lease "marries" the two interests and unlocks that extra value. Marriage value is the gap between the two — the uplift created by the extension itself.

Why it makes a short lease expensive to extend

Under the Leasehold Reform, Housing and Urban Development Act 1993, where the lease has fewer than 80 years left, marriage value is payable and is currently split 50/50 with the freeholder. In other words, the leaseholder has to pay the freeholder half of the extra value the extension creates, on top of the rest of the premium. This is why a short lease — under about 80 years — is so much more expensive to extend than one with plenty of term left.

What the Leasehold and Freehold Reform Act 2024 provides for

The Leasehold and Freehold Reform Act 2024 provides for the abolition of marriage value, which would take it out of the premium calculation and make extending a short lease considerably cheaper. However, as of 2026 that change is not yet in force. Marriage value therefore still applies to leases under 80 years, and you should check the current commencement position before assuming the abolition has taken effect — do not treat the reform as if it were already law.

Practical takeaway

If your lease is approaching 80 years, get a valuation and consider acting before it crosses the line. Even with the 2024 reforms on the horizon, the abolition of marriage value is not yet in force, so the 80-year rule still governs the cost today. A lease extension also resets your ground rent to a peppercorn, which is a further reason to act sooner rather than later.