The Autumn Budget delivered significant changes for taxpayers, landlords, and employers - but what does it mean for leaseholders?
While the Chancellor Rachel Reeves did not announce any direct reforms to leasehold law, the Budget introduces several economic shifts that will indeed indirectly affect many people who own leasehold homes. Combined with the leasehold reforms already in progress, this Budget marks an important moment for anyone living in, buying, selling or managing a leasehold property.
Here’s what leaseholders now need to know:
Rising costs may affect service charges and building maintenance
Higher wage costs, increased taxation and rising prices across the UK’s economy are likely to put pressure on maintenance and management companies.
This means leaseholders may see higher service charges, increased maintenance costs and greater pressure on reserve funds for major works. Even small inflationary increases can have a significant impact, particularly in larger or older buildings.
What should leaseholders do in preparation?
They could request transparency on service charge budgets and reserve funds, and challenge charges that appear disproportionate or unsupported.
Landlord Tax increases may affect mixed buildings and flats
The Budget includes higher tax burdens for landlords and property investors. While this primarily affects those letting out properties, it can also influence:
Where landlords face additional costs, these may be passed on in the form of above-inflation service charges, reduced maintenance investment, or less willingness to negotiate.
For leaseholders, this could mean less responsiveness from landlords or managing agents, increased pressure on building finances, and more disputes over service charge reasonableness.
Uncertainty in the housing market could impact flat values
Economic slowdowns and increased taxation on property investors inevitably influence the wider housing market. For leaseholders, particularly those in flats, this can have significant consequences.
Flats with shorter leases may lose value faster
Buyers are increasingly cautious in an uncertain market. A flat with under 90 years left on the lease is already less attractive - and mortgage lenders often become reluctant once a lease dips below 80 years. Economic instability only increases this sensitivity.
Mortgage lending criteria may tighten
As lenders reassess risk, they may introduce:
This may slow down sales or reduce the pool of potential buyers.
Market hesitation can affect your ability to sell
And if confidence then drops, flats typically feel the impact first. This is because supply is often higher than for freehold houses, lease length adds an extra layer of complexity and buyers may delay purchasing until conditions improve.
Leaseholders planning to sell in the next 12–18 months should consider early preparation - including reviewing the lease length and organising documents such as the LPE1 form*.
Leasehold reform is still underway - but not yet complete
There may be some good news on the horizon. Although not addressed directly in the Budget, major leasehold reform continues to move through the legislative process - meaning change is coming, but the exact timing remains uncertain.
This also means lease extensions may become cheaper. Proposed reforms include removing ‘marriage value,’ (the increase in a property's value that occurs when a leaseholder extends their lease, combining two separate interests -the lease and the freehold - into one) which could substantially reduce the cost of extending leases under 80 years. However, parts of the legislation are not yet activated, commencement dates are still pending and some rules may change depending on further consultation.
Acting now can sometimes be cheaper - waiting may or may not save money, depending on your specific lease and ground rent structure.
Service charge transparency and accountability are increasing
The broader leasehold reform agenda aims to:
Some improvements are already in place; others are waiting for implementation.
Right to manage and enfranchisement (a legal right when long leaseholders are offered to but the freehold of the building) will become more accessible
Future changes are intended to make it easier for leaseholders to take over management of their building, collectively buy the freehold, and challenge poor or exploitative management practices.
For many buildings that previously fell outside eligibility criteria, these reforms could open doors.
Now is the time to review your lease position
A future with rising costs and evolving legislation means that proactive planning is important for leaseholders. A few targeted checks now can prevent expensive issues later.
One essential is to check your lease length and ground rent structure.
Why? If your lease is approaching 80-90 years, extension should be a priority. Extending before the 80-year threshold avoids the costly ‘marriage value’ element. Additionally, lenders are increasingly wary of escalating ground rents, ground rent clauses tied to RPI, and ground rents above £250/£1000 (which can trigger AST – Assured Shorthold Tenancy rules)
Your lease’s wording matters - and should be reviewed.
And if your freeholder or management company is under pressure, it can affect the whole block.
How Coles Miller can help leaseholders
We understand how complicated leasehold ownership can be, and how quickly the legal and financial landscape is changing.
Our specialist Leasehold Team can help with:
We are here to guide you through every step after the Budget announcement, ensuring that your home, finances and future are protected.
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.
* An LPE1 form is a Leasehold Property Enquiries Form 1, which is a standard UK document used during the sale of a leasehold property to collect essential information for a buyer.