What is Marriage Value?

What is Marriage Value?

This is a frequently asked question and is not entirely straightforward to answer.

Current Legislation dictates that where lease have less than 80 years unexpired, then the lessee is required to pay “Marriage Value” in addition to the reduction in the Freeholder’s interest. Marriage Value is the difference between the combined value of the current freehold/leasehold interests and the future freehold/leasehold interests, with the latter being larger. Legislation has determined that leaseholder must pay 50% of this to the freeholder.

For example:

leaseholder’s present interest     = £200,000

plus landlord’s present interest     = £7,500                       = £207,500

 leaseholder’s new interest     = £225,000

plus landlord’s new interest     = £150                                   = £225,150

The marriage value is therefore £225,150 minus £207,500 = £17,650

This is then split 50:50 so that the Marriage Value figure payable by the leaseholder is £8,825. 

The shorter the lease means the wider the “gap” and therefore an increase in Marriage value payable. This is an area where the input of a valuer with local knowledge is extremely important to both parties in order to provide high quality comparable evidence from the local market. 

We have produced a useful guide to extending your lease which can be viewed here: https://www.henryadams.co.uk/extending-your-lease

Henry Adams have a team of Chartered Surveyors and RICS Registered Valuers based in Chichester that work closely with our network of offices across Sussex, Surrey and Hampshire to provide unrivalled professional advice based on sound local knowledge. If you have any queries relating to the above or Leasehold Reform in general, please do not hesitate to get in touch.