Journal
Leasehold Reform Act: What London Leaseholders Need to Know
By Seymont London ·
The leasehold reform act has arrived, and it's the most significant shake-up of leasehold ownership in England and Wales for decades. If you own a flat in London—or you're considering buying one—these reforms directly affect your rights, your costs, and the value of your property. Our team at Seymont London works with leaseholders across the capital every week, and we're seeing genuine confusion about what's changed and what it means in practice. This guide cuts through the noise and gives you the facts you need.
What the Leasehold Reform Act Actually Changes
The Leasehold and Freehold Reform Act 2024 received Royal Assent in May 2024, though not all provisions are in force yet. The headline changes include abolishing marriage value for lease extensions (historically, leaseholders paid a share of the property's increased value once the lease dropped below 80 years), increasing the standard lease extension term from 90 to 990 years for flats, and making it cheaper and simpler to buy your freehold or extend your lease.
The Act also bans new leasehold houses (with limited exceptions), caps ground rent at a peppercorn for most new leases, and gives leaseholders more transparency over service charges. For existing leaseholders in areas like Kensington—where short leases and high premiums have long been a headache—the removal of marriage value is a genuine game-changer. We've already started using our /tools/lease-extension-calculator to show clients how much they might save under the new rules.
How This Affects Your Property Value and Sale Timeline
If you're selling a flat with a lease below 80 years, the leasehold reform act makes your property significantly more attractive to buyers. Previously, mortgage lenders were cautious, and buyers factored in the cost of marriage value when negotiating. Now, extending a lease is cheaper and more predictable, which should speed up transactions and reduce the discount buyers demand for short leases.
That said, timing matters. The Act's provisions are being phased in, and the new valuation regulations—which determine exactly how premiums are calculated—are still being finalised by the government. If you're planning to sell or extend in the next 12 months, it's worth getting professional advice early. Our team regularly values leasehold properties across /property-for-sale/kensington and neighbouring areas, and we're seeing buyers ask more informed questions about lease terms than ever before.
Ground Rent and Service Charges: What's New
The leasehold reform act doesn't abolish ground rent for existing leases, but it does cap it at a peppercorn (effectively zero) for most new residential long leases. For existing leaseholders paying ground rent, the government has consulted on further reforms, but nothing is confirmed yet. If your ground rent doubles every decade or is otherwise onerous, keep an eye on future legislation.
On service charges, the Act gives leaseholders stronger rights to request information and challenge unreasonable costs. Freeholders and managing agents must now provide a standardised annual report, and leaseholders can apply to a tribunal more easily if charges seem excessive. According to the HomeOwners Alliance, service charge disputes are one of the top complaints from leaseholders, so these transparency measures are long overdue.
Next Steps: What Leaseholders Should Do Now
First, check your lease. Note the remaining term, the ground rent, and any unusual clauses. If your lease is below 85 years, extending sooner rather than later still makes financial sense, even with the new rules—property values and professional fees don't stand still. Second, budget for professional costs: you'll still need a surveyor and likely a solicitor, though the process should be quicker and less adversarial than before.
If you're buying, ask the seller (or their agent) for full details of the lease term, ground rent, service charges, and any planned major works. Lenders remain cautious about leases below certain thresholds, so factor that into your offer. And if you're weighing up whether to extend or sell, a professional valuation is the best place to start. You can book a phone appointment with Seymont London at /valuation to discuss your specific situation and get tailored advice on timing and costs.
Frequently asked
- When does the leasehold reform act come into force?
- The Leasehold and Freehold Reform Act 2024 received Royal Assent in May 2024, but provisions are being phased in over time. The ban on new leasehold houses and the peppercorn ground rent cap for new leases are already in effect. Key changes to lease extension costs and processes—including the removal of marriage value—require secondary legislation, expected throughout 2024 and 2025. Check GOV.UK for the latest commencement dates.
- Does the leasehold reform act apply to existing leases?
- Yes, many provisions apply to existing leaseholders. The removal of marriage value and the extension to 990-year terms apply when you extend an existing lease. However, the peppercorn ground rent cap generally applies only to new leases granted after the relevant commencement date, not to ground rent on leases already in place.
- How much will a lease extension cost under the new rules?
- The leasehold reform act removes marriage value from the calculation, which can save tens of thousands of pounds on flats with leases below 80 years. The exact cost depends on your property's value, the ground rent, and the remaining lease term. Professional fees (surveyor, solicitor) still apply. Use an online calculator or instruct a surveyor for a formal estimate based on your lease.
- Can I still extend my lease before the new rules take full effect?
- Yes. If your lease is short, you may want to start the process now rather than wait for final regulations. The current rules are well-established, and delays can cost you in falling property value or higher premiums. Once the new valuation framework is confirmed, you can decide whether to pause and wait or proceed under existing law.
- Will the leasehold reform act make flats easier to sell?
- Yes, especially flats with shorter leases. Buyers and lenders are more confident when lease extensions are cheaper and more predictable. Transparency around service charges and ground rent also reduces friction. However, a short lease is still a short lease—extending before you sell, or pricing accordingly, remains important.