Last updated: 20 July 2026. This page is reviewed and updated as the legislation develops.
Leasehold reform affects around five million leaseholders in England and Wales. At present there are two pieces of legislation impacting the proposed leasehold reforms: The Leasehold and Freehold Reform Act 2024, which is law but largely not in force in legal practise, and the Commonhold and the draft Commonhold and Leasehold Reform Bill, which has not yet been introduced to Parliament. This page sets out what has happened, what is in force, what is not, and the implications for anyone considering a lease extension.
The position, at a glance:
- Successive governments have committed to leasehold reform since 2019. To date, a small number of the changes have changed in legal practise.
- The abolition of marriage value and 990-year lease extensions have been proposed in law, but are not yet in legal practice and the proposed replacement valuation rates have not been determined. No implementation date has been set.
- On 15 July 2026, the Government opened two consultations on the detail of the 2024 Act: one on the valuation rates that will determine lease extension premiums, and one on process costs. Both close on 23 September 2026. The consultations ask about approaches to setting the rates; no figures have been proposed or set.
- The 2024 Act cannot be brought into force until a new Bill corrects flaws in it, the consultation on valuation rates (which opened on 15 July 2026) has concluded, and regulations have been approved by Parliament. A legal challenge to the removal of marriage value by freeholders is also ongoing.
- At present it is understood that the necessary actions required to the existing 2024 Act and the review and introduction of the Commonhold and Leasehold Reform Bill are likely to take a minimum of 2 further years to implement.
- Lease extensions continue as normal under the Leasehold Reform, Housing and Urban Development Act 1993.
What has happened: the timeline
| Date | Event |
|---|---|
| 2019 | The Government first commits to leasehold reform |
| January 2020 | The Law Commission publishes its recommendations on enfranchisement valuation, followed by reports on lease extensions, freehold purchase and Right to Manage |
| 24 May 2024 | The Leasehold and Freehold Reform Act 2024 receives Royal Assent, passed in the pre-election “wash-up” period |
| 31 January 2025 | The two-year ownership rule is removed, the first substantive provision of the Act to take effect |
| October 2025 | The High Court dismisses a judicial review of the Act brought by six groups of freeholders. Permission to appeal to the Court of Appeal is later granted |
| 27 January 2026 | The Government publishes a draft Commonhold and Leasehold Reform Bill for pre-legislative scrutiny |
| 13 May 2026 | The Bill is confirmed in the King’s Speech |
| 27 May 2026 | The Housing, Communities and Local Government Select Committee publishes its report on the draft Bill |
| 15 July 2026 | The Government opens consultations on the enfranchisement valuation rates and on process costs, both closing on 23 September 2026 |
No date has been set for the reforms that affect the cost of a lease extension. The reasons are set out below.
The Leasehold and Freehold Reform Act 2024
The Act was passed by the previous government on 24 May 2024 however many aspects of the law remain outstanding in legal practise. Below is a summary of current status of each element of the Act that are currently in force (legal practise) or remain outstanding (not in legal practise).
In force now:
- The two-year ownership rule has been abolished (31 January 2025). A leaseholder no longer needs to have owned the property for two years before starting a statutory lease extension. Implication: buyers of short-lease flats can begin an extension on completion day.
- Right to Manage costs. Leaseholders taking over management of their building through the Right to Manage no longer have to pay their freeholder’s costs of the process, and more leaseholders in mixed-use buildings qualify.
Not in force:
- Abolition of marriage value. Marriage value is the share of the increase in a property’s value created by extending a short lease. Under current law, leaseholders whose leases are below 80 years must pay 50% of it to the freeholder, which can more than double the premium. The Act removes marriage value from the calculation entirely.
- 990-year lease extensions, replacing the current 90 additional years for flats. In value terms the difference between a very long lease and a 990-year one is small; the practical effect is that no further extension would ever be needed.
- A cap on ground rent within the valuation. Ground rent would be treated as capped at 0.1% of the freehold value when calculating the premium. This helps leaseholders with high or escalating ground rents. An exception applies where the freeholder can show the lease was originally granted at a lower premium in exchange for a higher rent.
- Banning of New Leasehold Flats. Stopping the creation of new build leasehold flats and houses – not the banning of existing leasehold properties.
- Government-prescribed valuation rates. The deferment and capitalisation rates used in the calculation, currently negotiated case by case between valuers, would instead be set by the Government in regulations.
- Each side pays its own professional costs. Leaseholders currently pay the freeholder’s legal and valuation fees as well as their own; the Act ends this in most cases, with exceptions expected for low-value claims.
Why the 2024 Act is not in force
On taking office in July 2024, ministers were advised that the Act contains a small number of specific but serious flaws that prevent key provisions operating as intended, and that these can only be corrected through new primary legislation. According to the Government’s May 2026 explainer on the fixes, the flaws are:
- A valuation loophole. The new valuation process as drafted would allow some parties to avoid paying the correct price for a lease extension or freehold purchase, compromising the integrity of the new method.
- Shared ownership leases. The Act gives shared ownership leaseholders the right to extend, but gives no equivalent right to their shared ownership providers (typically housing associations) where the provider holds a lease rather than the freehold. Without their own extension rights, providers cannot grant 990-year extensions.
- Process costs for third parties. The Act moves to a system where each party pays its own process costs, but omits an exception allowing third parties such as resident-led management companies to recover contributions. Uncorrected, this puts those companies at risk of insolvency.
- Redevelopment break rights. The Act unintentionally constrains freeholders’ existing rights to end leases for redevelopment of a building at the end of its life, in limited circumstances involving complex chains of leases.
- Minor drafting corrections, including incorrect cross-references within the Act.
The Government has confirmed the sequence required before the new system can operate: first, pass the Commonhold and Leasehold Reform Bill containing the fixes; second, publicly consult on the valuation rates and on leaseholders’ contributions to landlords’ costs where exceptions apply; third, set the detail in regulations approved by Parliament; fourth, commence the new system. Step two began on 15 July 2026, when the Government opened two consultations, one on the valuation rates and one on process costs, both closing on 23 September 2026. Step one, the Bill itself, has not yet begun its passage through Parliament.
The Commonhold and Leasehold Reform Bill
The Government published the Bill in draft on 27 January 2026. The Housing, Communities and Local Government Select Committee took evidence in spring 2026 and reported on 27 May 2026. The Bill was confirmed in the King’s Speech on 13 May 2026 but has not yet been introduced to Parliament.
For existing leaseholders, the Bill matters chiefly because it carries the fixes to the 2024 Act described above; until it passes, the marriage value and valuation reforms cannot be commenced. The Bill also proposes reforms to commonhold for new flats, a £250 cap on ground rents in existing leases, and the abolition of forfeiture. It is expected to run to around 260 sections.
Separately, the Housing Minister confirmed in an April 2026 speech that a further bill, a third piece of legislation, will be needed to implement the Law Commission’s remaining recommendations on lease extensions, freehold purchase and Right to Manage.
The freeholders’ legal challenge
Six groups of freeholders have brought judicial review proceedings against the Government, arguing that provisions of the 2024 Act, including the removal of marriage value and the changes to costs, breach their rights under the Human Rights Act. The High Court dismissed all of the claims in October 2025. The freeholders have since been granted permission to appeal to the Court of Appeal, and cases of this kind can proceed to the Supreme Court and beyond.
The litigation matters for two reasons. It is a further source of delay, and it constrains the Government when setting the new valuation rates: the rates must be defensible as reflecting market value, or they risk fresh legal challenge.
How the reforms would change lease extension costs
Leases below 80 years. Abolishing marriage value removes what is often the largest single element of the premium for short leases. For this group, the reforms could reduce costs, in some cases substantially.
High ground rents. Where ground rent exceeds 0.1% of the property’s value, the valuation cap should reduce the cost of buying out the ground rent as part of an extension.
Leases above 80 years with low ground rent. This group pays no marriage value now and gains nothing from the ground rent cap, so their premium under the new system depends almost entirely on the prescribed rates. The key rate, the deferment rate, has stood at 5% for flats since the Upper Tribunal’s Sportelli decision in 2007. It compensates the freeholder for receiving the property back at the end of the lease. If the Government sets the rate below 5%, premiums for this group rise; if above, they fall. A consultation on the rates opened on 15 July 2026 and closes on 23 September 2026. It asks about approaches to setting the rates rather than proposing figures, so the effect on any individual lease still cannot be calculated. Leaseholders with over 80 years and nominal ground rents, such as many owners of ex-local authority flats, are the group most exposed if rates are set less favourably than today’s.
Two facts are calculable now, under the current rules: the premium rises every year as a lease shortens, and once a lease falls below 80 years, marriage value applies and the cost can more than double.
When will the reforms take effect?
No implementation date exists. Before the new system can operate: the Bill must pass both Houses of Parliament; the rates consultation, open until 23 September 2026, must conclude and be considered; regulations must be laid and approved; and the appeal process in the courts will continue in parallel. On any realistic view it is unlikely anything will be resolved for at least two years, and it could be considerably longer. Clear answers and clear timelines from Government would help every leaseholder plan, and that is something we, along with practitioners across the sector, continue to call for.
What this means if you are considering a lease extension
We do not advise clients to wait or to proceed. The reforms have no implementation date, some leaseholders could pay more under the new system rather than less, and every lease is different, so the decision rests on your own facts:
- Lease length. Below 80 years, marriage value already applies. Between 80 and 90 years, each year of delay adds cost, and crossing the 80-year line under the current rules can more than double the premium.
- Your plans. A short lease can complicate a sale or remortgage today.
- Ground rent. A statutory lease extension already reduces ground rent to a peppercorn (zero), and has done since the 1993 Act. This does not depend on any of the reforms.
Most lease extensions do not begin because somebody wakes up thinking about leasehold law. They begin because life changes: a relocation, a growing family, a fixed-rate mortgage coming to an end, retirement plans shifting. A lease that hasn’t crossed your mind for years suddenly becomes one of the most important parts of a property transaction. A lease extension is rarely an emergency in itself; it becomes one when it is left until a sale or remortgage is already underway. The best time to understand your lease is before any deadline exists, with time to consider the likely premium, understand how lenders may view the property, and decide whether extending fits your plans rather than somebody else’s timetable.
It is also worth noting that no one will necessarily prompt you. Many leaseholders assume their solicitor, managing agent or mortgage lender will flag a shortening lease before it becomes significant. More often, the conversation starts because something else has happened: a sale has been agreed, a remortgage is underway, or a buyer’s solicitor has asked a question nobody expected. The leaseholders who tend to have the fewest problems are not necessarily those with the longest leases; they are the ones who understand their position early enough to make decisions on their own timetable. Reviewing your lease deserves the same routine attention as reviewing your mortgage.
The starting point is real numbers for your lease. You can work out your premium esitmate with our calculator, and our guide on how to extend your lease explains the process step by step.
FAQs
Should I wait for leasehold reform before extending my lease?
No one can answer this reliably, because the reforms have no implementation date and the new valuation rates have not been set. As the current law stands, premiums rise as leases shorten, marriage value applies below 80 years under the current rules, and some leaseholders could pay more under the new system.
What is the 80-year rule?
Once a lease falls below 80 years, marriage value becomes part of the premium and the cost of extending rises sharply, often more than doubling. Our Jargon Buster explains marriage value, peppercorn rent and the other terms you’ll come across.
Has marriage value been abolished?
It has been abolished in law by the 2024 Act, but that provision is not in force and has no implementation date. Marriage value still applies to leases under 80 years.
Is the £250 ground rent cap in place?
No. It is a proposal in the forthcoming Bill. A statutory lease extension already reduces ground rent to a peppercorn, so the cap adds little for leaseholders who extend.
What is commonhold?
Commonhold is a form of ownership in which flat owners own their homes outright and jointly manage the building. It was introduced in 2002 and has rarely been used. The forthcoming Bill proposes reviving it for new flats. Nothing changes automatically for existing leaseholders.
Many leaseholders ask whether they should simply wait for the new system to arrive. Commonhold will not automatically replace existing leasehold ownership; that is not how the proposals are intended to work. In the meantime, a lease continues to reduce in length, lenders continue to assess remaining terms and buyers continue to consider a property’s marketability. None of those factors pauses while the legal framework develops, so existing leaseholders will continue making decisions under today’s rules for some time yet.
Can I still extend my lease while reform is going on?
Yes. The statutory route under the 1993 Act is fully operational and unaffected by the reform process.
How much does a lease extension cost?
Two parts: the premium paid to your freeholder, which depends on your lease length, ground rent and property value, and the professional fees. We handle the entire process for a genuinely fixed fee, using a panel of the country’s leading specialist solicitors and surveyors, typically saving our clients several hundred pounds compared with going direct. See our fixed-fee lease extension page for details.
You’ll find more answers on our FAQs page.
Where does this leave you?
The LEC supports leasehold reform. The facts, though, are these: the law that would change lease extension costs is not in force, the detail that determines whether individual leaseholders gain or lose has not been written, and no implementation date exists. Decisions therefore have to be made on the rules as they stand.
Supporting reform and managing your current lease are not competing priorities. In our experience, the leaseholders who feel most confident about future changes are usually the ones who already understand their position today and their priorities.
At the LEC we can assist you understand what your extension would cost today, save you time money and stress using our panel of industry leading experts for a money saving fixed fee, and keep you supported at every step. Esitmate your premium with our calculator, or get in touch for a fixed-fee quote tailored to your lease.
This article is for general information and is not legal advice. Every lease is different, so for advice on your specific situation, speak to our team.
