Should I Extend My Lease Now or Wait for Leasehold Reform?

If your lease is getting shorter, you have probably heard that extending is about to become cheaper. That is partly true: the law that will change the price has been passed. It has not been switched on, and nobody can yet say when it will be, or what the new price will be. Here is where things stand in September 2026, and how to weigh the cost of waiting.

What Will Change, and What Has Not Changed Yet

The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024. For lease extensions and freehold purchases it will:

• remove marriage value from the premium, so leases of 80 years or less no longer pay the landlord a share of the value released by the extension;
• cap the ground rent used in the calculation at 0.1% of the freehold value;
• use deferment and capitalisation rates set by the government rather than argued case by case; and
• allow flat owners to extend to 990 years at a peppercorn ground rent, instead of adding 90 years.

None of these valuation changes is in force. A lease extension claimed today is valued under the old rules, including marriage value where the lease has 80 years or less to run. The one change most people noticed, the end of the two-year ownership requirement, has applied since 31 January 2025.

Separately, the government has published a draft Commonhold and Leasehold Reform Bill. Among other things it would cap ground rents in existing leases at £250 a year, falling to a peppercorn after 40 years. That Bill has not yet been introduced to Parliament. Its ground rent cap is a proposal, not law.

Why the Timing Is Uncertain

Four things stand between today and the new valuation rules:

• The 2024 Act has to be fixed. On 15 July 2026 the housing minister told Parliament that flaws in the Act, including a loophole in the new valuation method, will be corrected in the Commonhold and Leasehold Reform Bill. The government intends to commence the enfranchisement provisions as soon as possible after that Bill receives Royal Assent.
• The rates have to be set. The government's consultation on valuation rates closes on 21 October 2026. For flats, the options include keeping the 5% deferment rate tribunals have used for years or updating it; the government's own analysis suggests an updated rate of about 6.3%, though the consultation says that is not a ceiling. Higher rates mean lower premiums.
• The legal challenge is unresolved. Freeholders challenged the reforms as a breach of their property rights. The High Court dismissed the challenge on 24 October 2025 (ARC Time Freehold Income Authorised Fund and others v Secretary of State for Housing, Communities and Local Government [2025] EWHC 2751 (Admin)), but the Court of Appeal granted permission to appeal on 1 April 2026. The appeal is reported to be listed for April 2027.
• Commencement regulations have to be made. The House of Commons Library describes the aim as implementation "as soon as possible from 2027". No date has been set.

The Honest Cost of Waiting

Waiting is a bet: that the reforms arrive before your lease becomes much more expensive to extend, and that the new rates are favourable. The table below illustrates the trade-off for a flat worth £300,000 with a fixed ground rent of £250 a year, comparing extending now with waiting three years.

These are premiums only, rounded, and purely illustrative. They assume a 5% deferment rate and 7% capitalisation rate under the current law, a 6.5% capitalisation rate under the reforms, and our own assumptions for the value of a short lease. Your figures will differ, and the final rates are not yet known.

Three points stand out:

• Above 80 years, reform may save little. With no marriage value to remove, the saving depends almost entirely on the rates chosen. At a 5% deferment rate, the lease that is 83 years today costs more to extend in three years' time under the new rules than it does now.
• Below 80 years, the potential saving is larger, but so is the cost of delay. Under the current law, every year of waiting pushes the premium up, and faster as the lease shortens.
• If the reforms are later than you hoped, you lose on both counts. You pay more, and your flat has been harder to sell or remortgage in the meantime.

Things the Numbers Do Not Show

Selling and remortgaging. Each lender sets its own minimum lease length. A short lease narrows the lenders available to you and to any buyer, whatever the law on premiums says.

Legal costs. Under the current law you also pay the landlord's reasonable legal and valuation costs. The 2024 Act changes that too, but again not yet.

Your plans. If you need to sell or remortgage within the next couple of years, the case for waiting is weak at almost any lease length.

Our View

Get a valuation now, even if you decide to wait. It gives you a real figure to set against the possible savings.

• Lease at 80 years or less: the cost of delay is real and rising. Wait only if you can live with the lease for several more years and accept the risk that reform is later than hoped.
• Lease between about 80 and 85 years: this is the hardest call. Once the lease reaches 80 years, marriage value applies under the current law, so decide before then. Serving a notice while the lease still has more than 80 years left keeps marriage value out of the premium.
• Lease well above 85 years: there is less urgency, and reform may make little difference to your premium. Review the position once the rates are announced.

For more on how premiums are worked out, see how much a lease extension costs and what happens when your lease falls below 80 years. If you would like a clear view of your own numbers, find out more about our lease extension service or call us on 020 3540 9996.