Collective enfranchisement—marriage value and hope value
Collective enfranchisement—marriage value and hope value

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Collective enfranchisement—marriage value and hope value
  • Marriage value and hope value
  • Human Rights
  • Marriage value—participating tenants
  • Marriage value—tenant’s interest
  • Marriage value and lease variation
  • No power to provide for provisional price
  • Development value

Marriage value and hope value

‘Marriage value’ is the increase in value that occurs where a tenant acquires the freehold, as a result of which the full value of the unencumbered freehold is unlocked. It is the additional price that the tenant would be willing to pay for the freehold in order to secure the opportunity of receiving marriage value, as compared with a third party buyer who would have to take the freehold subject to the tenant’s interest.

If the tenant is not in the market at the time of the sale, there can be no realisation of marriage value, and so the price will not include it. However, even if the tenant is not in the market at that time, there is still the possibility (or hope) of a future sale of the freehold to the present tenant or a successor in title, or a future acquisition of the leasehold interest, thereby enabling a release of the marriage value in the future: this is called ‘hope value’. Hope value is therefore the additional price that a third party buyer would be willing to pay in order to secure the opportunity of a future realisation of marriage value.

Landlords and third party investors are interested in marriage value (and therefore also hope value) because in certain instances both the Leasehold