Leasehold Reforms: should I extend my lease now or wait?

Over the past few years, leaseholders have seen major proposed changes to the leasehold system, including the abolition of marriage value and the introduction of 990 year statutory lease extensions.

Although legislation has been passed to introduce significant reforms, many of the most important changes have yet to come into force. For leaseholders considering an extension now, this creates an important question:

Should you proceed under the existing rules or wait for the reforms?

What are the reforms?

The Leasehold and Freehold Reform Act 2024 received Royal Assent on the 24 May 2024. It contains significant reforms to leasehold enfranchisement, including changes intended to make it easier and, in some circumstances, cheaper for leaseholders to extend their leases or purchase their freehold. However, many of the key provisions still require further legislation before they can take effect.

Among the proposed changes are:

• increasing the standard statutory lease extension term to 990 years, with ground rent reduced to a peppercorn;
• removing marriage value from the calculation of the premium;
• changing the way ground rent is treated when calculating the premium, including a cap of 0.1% of the property’s value for valuation purposes; and
• changing the rules regarding the payment of the freeholder’s costs.

Importantly, these key financial changes are not yet in force.

The Government has also announced further leasehold and commonhold reforms which are intended to form part of the forthcoming Commonhold and Leasehold Reform Bill. These include proposals concerning commonhold and a separate proposal to cap ground rents in existing residential leases at £250 per year, reducing to a peppercorn after 40 years.

The aim of the legislation is to make it easier, simpler and in some cases cheaper for leaseholders to extend their lease. The removal of the requirement to pay marriage value and to pay the freeholders costs will make the process cheaper for many. However, this will depend on the detailed valuation rules, the prescribed rates and the leaseholders circumstances.

The Act does not specify the rates that will be used to determine the premium. The government is consulting on the deferment and capitalisation rates. Until those rates are finalised it is not known whether the cost of lease extensions will be cheaper for leaseholders.

What changes are already in force?

Some provisions of the 2024 Act have already been implemented.  

These include the removal of the previous two-year ownership requirement before a qualifying leaseholder can exercise the statutory right to extend their lease.

Buildings with up to 50% non-residential floor space can qualify for the Right to Manage. Leaseholders will also no longer be required to have to pay the freeholders non-litigation legal costs.

Other changes have also been introduced in stages, but many of the reforms which could have the greatest impact on the cost of extending a lease remain to be implemented.  

When will the financial parts be in force?

There is currently no confirmed date for all of the key financial reforms to come into force. Implementation requires further legislation and regulations setting out important technical details. The Government has stated that it intends to implement the reforms as soon as possible, but it must first complete the necessary legislative steps.  

There is also ongoing litigation concerning elements of the 2024 Act. The High Court dismissed a challenge brought by a number of freeholders in October 2025, but that decision is under appeal. The Government has said that it is continuing with implementation of the 2024 Act while defending the appeal.

Leaseholders should therefore be cautious about attempting to predict precisely when the new valuation regime will become available.

Will the reforms make a lease extension cheaper?

Potentially but not necessarily in every case.

One of the most significant reforms is the proposed abolition of marriage value. Under the existing statutory regime, marriage value can affect the premium payable where a lease has 80 years or fewer remaining. Its abolition could therefore substantially benefit some leaseholders with shorter leases.

The proposed changes to the treatment of ground rent may also benefit some leaseholders, particularly where a lease contains a high or increasing ground rent.

However, the eventual premium will depend upon a number of factors, including the remaining term of the lease, the value of the property, the ground rent provisions and the valuation rates ultimately prescribed under the new regime.

It is therefore important not to assume that every leaseholder will necessarily achieve a cheaper extension by waiting.

Should I extend my lease now or wait?

This is where individual circumstances become particularly important.

If you have a relatively long lease and are not planning to sell or remortgage in the near future, you may decide to wait and see how the reforms develop.

The position may be different if your lease is approaching 80 years, you are planning to sell or remortgage, or the length of the lease is already affecting the property’s marketability or mortgageability.

Although the proposed abolition of marriage value could benefit leaseholders with shorter leases, the timing of the reforms remains uncertain. Delaying an extension therefore involves balancing the possible benefits of the new regime against the consequences of allowing the remaining term of the lease to reduce further.

It may also be worth exploring whether a lease extension can be agreed voluntarily with the freeholder outside the statutory procedure. Any proposed terms should be considered carefully alongside the statutory route.

For these reasons, there is no single answer which will be right for every leaseholder. Taking advice on the likely premium and the available options can help you make an informed decision about whether to extend now or wait.

How can Pinney Talfourd help?

Our experienced Residential Property team can provide clear, practical advice on extending your lease, purchasing your freehold and understanding how the proposed leasehold reforms could affect your property.

Whether you’re considering extending your lease now or waiting for the new legislation to take effect, our team can help you understand your options and make an informed decision.

For further advice, contact your nearest Pinney Talfourd office on 0800 011 1195 or email .