Marriage Value Explained
Marriage value is the reason two flats with the same lease, one at 81 years and one at 79, can cost very different amounts to extend.
What Marriage Value Is
When a leaseholder extends their lease or buys the freehold, the flat is usually worth more afterwards than the separate interests were worth before. That uplift, created by bringing the interests together, is the marriage value.
Under the current statutory valuation rules, the premium for a lease extension or collective freehold purchase includes the landlord's share of that marriage value, set at 50 per cent, on top of compensation for the ground rent and the landlord's future interest.
The 80-Year Point
Marriage value is disregarded where the lease has more than 80 years left to run. Once it drops to 80 years or below, it counts, and because the gap between a short lease and a long one grows as the term falls, the share payable grows with it.
That is why lease extension advice so often says to act before 80 years. It is a valuation rule, not a deadline in the lease itself, and a valuer is the person to put a number on it for a particular flat.
Where the Abolition Stands
The Leasehold and Freehold Reform Act 2024 contains provisions that would remove marriage value from these calculations and change the other valuation inputs. Those provisions have not been brought into force, and no commencement date has been set. Some freeholders have also challenged the reforms in the courts, and the rates the new rules depend on have not yet been set. Until the provisions are commenced, the 80-year rule and the 50 per cent share continue to apply.
Anyone deciding whether to wait should take advice on their own figures: a lease that keeps shortening while the law is unsettled is still losing value.
Common Questions
What Is Marriage Value in a Lease Extension?
The increase in value created when a leaseholder extends the lease or buys the freehold. Under the current rules the landlord receives half of it as part of the premium, but only where the lease has 80 years or less to run.
When Will Marriage Value Be Abolished?
No date has been set. The Leasehold and Freehold Reform Act 2024 provides for it, but the valuation provisions have not been brought into force, so marriage value still applies to leases of 80 years or less.
Does Marriage Value Apply to a Lease over 80 Years?
No. It is disregarded where more than 80 years remain, which is why extending before the lease reaches 80 years usually costs less.
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