The history of Marriage Value in leasehold valuation

In certain contexts where a leasehold in England is trying to extend or buy out the remaining term of a lease, something called "Marriage Value" (MV) is payable. This is the industry lingo for a corresponding economic concept whose name I can no longer remember.

Briefly, the history of the allocation of MV is that over time, 50% of it came to be payable to the freeholder in certain circumstances. That history is as follows:

• 1967 - the Leasehold Reform Act allows enfranchisement, whereby houses' freeholds may be purchased by the leaseholder
• 1969 - the case of Custin v Hearts of Oak determined that MV was payable
• later in 1969 the effect of the case was reversed by section 82 of the Housing Act 1969
• But in 1974, the payable of MV was reintroduced by statute
• The 1987 Landlord & Tenant Act effectively excluded MV from the valuation of freeholds during acquisition orders (which arise from mismanagement) and under the Right of First Refusal
• Then in 1993, the leasehold reform statute of that year specified explicitly that some of the MV should be payable to the freeholder, for houses and flats (flats now becoming enfranchisable)
• In the 2002 reforms, the payable share of MV was set to 50% by section 127 of the Commonhold & Leasehold Reform Act
• But in 2024, Parliament legislated to implement the 2021 proposal by Robert Jenrick (then Secretary of State) to reduce the payable share of MV to zero; this has since been challenged in the courts.

Law Commission paper re enfranchisement

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