If you own a leasehold flat, your lease is one of your property's most important assets. However, unlike a freehold property, the value of a leasehold property can reduce as the length of the lease decreases.
For many leaseholders, extending a lease can help protect the value of their property, improve mortgage ability and make a future sale easier. With leasehold reform continuing to evolve, 2026 is an important time to understand your rights and options.
Why does the length of a lease matter?
A lease is effectively a long-term right to occupy a property for a fixed period of time. As the lease term shortens, the property's value can begin to decrease.
Mortgage lenders can also become increasingly cautious about lending on properties with shorter leases. This can make it harder to sell or remortgage a property and may reduce the number of potential buyers.
One of the most important thresholds is 80 years remaining on the lease. Once a lease falls below this point, the cost of extending it can increase significantly because of a valuation element known as ‘marriage value’.
For this reason, residential leaseholders are often advised to consider extending their lease well before it reaches the 80-year mark.
What are the current lease extension rights?
Traditionally, qualifying leaseholders of flats have had the statutory right to extend their lease by an additional 90 years, with ground rent reduced to a peppercorn (effectively zero), under the Leasehold Reform, Housing and Urban Development Act 1993. *
A statutory lease extension can provide long-term security while also removing ongoing ground rent obligations.
What has changed?
The Leasehold and Freehold Reform Act 2024 introduced some of the biggest leasehold reforms in a generation.
One important change that has already been implemented is the removal of the previous two-year ownership requirement. This means many leaseholders no longer need to wait two years after purchasing a property before exercising their lease extension rights.
The Act also contains provisions intended to make lease extensions easier and more affordable for leaseholders, although not all reforms have yet been brought into force.
What reforms are still expected?
The Government continues to progress wider leasehold reforms.
Among the proposed changes are:
While these proposals have attracted significant attention, not all have yet come into force and the current legal position remains subject to implementation timetables and further regulations.
What about ground rent?
Ground rent remains a major concern for many leaseholders, particularly those with older leases containing escalating or doubling ground rent provisions.
The Government has published draft proposals to cap ground rents on existing leases at £250 per year before eventually reducing them to a peppercorn rent. However, these proposals are not yet law and may take time to be implemented.
In the meantime, one of the key benefits of a statutory lease extension is that the ground rent on the new lease is reduced to a peppercorn, effectively eliminating future ground rent payments.
Should we wait for future reforms?
This is one of the most common questions leaseholders ask.
While further reforms are anticipated, there is no guarantee as to exactly when all changes will take effect or how they will impact individual leaseholders. In some cases, waiting could mean a lease becomes shorter, potentially increasing extension costs or affecting saleability.
Every leasehold property is different. Factors such as the remaining lease length, ground rent provisions and future plans for the property should all be considered before deciding whether to proceed now or wait for future legislation.
How Coles Miller can help
Lease extensions can be legally and procedurally complex. Early advice can help leaseholders understand their rights, timescales and potential costs before making important decisions.
The Residential Property team at Coles Miller can advise leaseholders on the lease extension process, eligibility requirements and the practical implications of the latest reforms. We work closely with clients to help them protect the value of their property and navigate an area of law that continues to evolve.
Whether your lease is approaching 80 years, you are planning to sell, or you simply want to understand your options, our team can provide clear and practical guidance tailored to your circumstances.
Don't leave it too late
A lease extension can often be easier and more cost-effective when dealt with early.
With significant leasehold reforms continuing to develop, now is an ideal time to review your lease and understand your options. Taking advice sooner rather than later could help you avoid unnecessary costs and protect the long-term value of your home.
An important note: Leasehold reform remains a developing area of law. While the Leasehold and Freehold Reform Act 2024 introduced significant changes, not all provisions have yet been brought into force and further government reforms are expected. The information in this article reflects the position at the time of writing, but individual circumstances can vary. Leaseholders should seek professional legal advice before making decisions about extending their lease, particularly where they are considering whether to proceed now or wait for future reforms.
Get Expert Legal Advice
If you are a leaseholder, and seek professional advice on your properties, please contact Nick Leedham, Partner and Head of Residential Leasehold at Coles Miller Solicitors.
* https://www.legislation.gov.uk/ukpga/1993/28/contents