Lease Extension Premium Estimator (Post-Reform 2024)
Estimate the premium for extending your lease under the new 2024 valuation rules. Marriage value is no longer payable for leases under 80 years.
This is a rough estimate only. Actual premiums depend on surveyor negotiations, capitalisation rates, and specific circumstances. Always instruct a specialist leasehold surveyor.
The Leasehold and Freehold Reform Act 2024: Timeline
What the Leasehold and Freehold Reform Act 2024 Changes
The Leasehold and Freehold Reform Act 2024 is the most significant overhaul of residential leasehold law in decades, fulfilling longstanding political promises to end what campaigners called the "feudal" leasehold system. Below are the key changes and what they mean for leaseholders:
1. Lease Extensions: 990 Years (Up from 90)
Under the previous law, flat owners could extend their lease by 90 years (houses by 50 years). The 2024 Act increases this to 990 years for flats and houses alike. This is effectively a permanent lease — no leaseholder extending today will ever need to extend again. The extension is granted with a zero ground rent (or peppercorn rent), meaning freeholders cannot charge ongoing ground rent on the extended term.
Key Benefit: A 990-year lease is, for all practical purposes, a freehold. You will never face the stress, expense, or potential unmortgageability of a short lease again.
2. Abolition of Marriage Value for Sub-80-Year Leases
Marriage value was one of the most contentious and expensive elements of the old leasehold extension system. When a lease had fewer than 80 years remaining, leaseholders had to pay the freeholder 50% of the "marriage value" — the additional value created by merging the two interests. This could add tens of thousands of pounds to the cost of an extension.
The 2024 Act abolishes marriage value entirely for statutory lease extensions. This is a major win for the estimated 1.4 million leaseholders with leases below 80 years. The premium calculation now uses a simpler method based on ground rent, deferment value, and relativity.
| Lease Remaining | Old System (Marriage Value) | New System (No Marriage Value) |
|---|---|---|
| 85+ years | No marriage value | No change (already no marriage value) |
| 79 years | Pay ~10% marriage value premium | Marriage value abolished — cheaper |
| 70 years | Pay significant marriage value | Substantial saving |
| 60 years | Very expensive — marriage value high | Dramatically cheaper |
| 50 years | Often unaffordable — massive premium | Now accessible for many more |
3. Collective Enfranchisement: Easier to Buy Your Building's Freehold
Collective enfranchisement is the right of a group of flat owners to jointly purchase the freehold of their building. Under the old rules, this was complex, expensive, and often blocked by freeholders using legal loopholes. The 2024 Act makes several improvements:
- The participation threshold has been reformed to make it easier for enough leaseholders to qualify.
- The valuation methodology has been updated, reducing the premium payable.
- Commercial premises restrictions have been relaxed, meaning more mixed-use buildings now qualify.
- Freeholders face tighter restrictions on challenging the process.
To exercise the right, at least 50% of qualifying leaseholders in the building must participate. You do not need a majority of the total flats — just 50% of those who qualify (excluding non-residential units).
4. Service Charge Transparency: New Leaseholder Rights
The 2024 Act introduces significant new rights around service charges — the fees leaseholders pay for building maintenance, insurance, and management:
- Standardised information: Freeholders must provide service charge accounts in a prescribed format, making it easier to understand and challenge.
- Right to challenge: Leaseholders have strengthened rights to challenge service charges they believe are unreasonable at the First-tier Tribunal.
- Insurance transparency: Freeholders must disclose insurance commissions and kickbacks paid to managing agents.
- Administration charge reform: Restrictions on the charges freeholders can make for processing lease assignments, subletting consents, and similar transactions.
5. Right to Manage (RTM): Easier to Take Control
The Right to Manage allows leaseholders to take over the management of their building without buying the freehold and without proving any fault against the existing managing agent or freeholder. Under the old system, freeholders could recover their legal costs from the RTM Company, making the process expensive and risky. The 2024 Act changes this:
- Freeholders can no longer recover their costs from the RTM Company in contested cases.
- The qualifying criteria have been reformed to include more buildings.
- The process for managing mixed-use buildings has been simplified.
6. Estate Management Charges on New Housing Estates
A growing problem on new-build housing estates is the imposition of estate management charges on freehold homeowners for shared green spaces, roads, and communal areas. Developers build these in without any statutory framework, and homeowners have had little recourse against unreasonable charges.
The 2024 Act introduces a new legal framework giving estate management charge payers rights similar to those of flat leaseholders, including the right to challenge charges and to take over management via a new right to manage process.
7. Commonhold: Encouraged as the Long-Term Alternative
Commonhold is a system of flat ownership where each owner holds their unit on an outright freehold basis, with all owners collectively managing and owning the common areas through a Commonhold Association. It is the standard system in most of Europe, Australia, and North America, and is widely seen as a fairer alternative to leasehold.
The 2024 Act includes measures to encourage the use of commonhold for new developments and conversions from leasehold. While a full transition to commonhold will require further legislation, the direction of travel is clear: the government wants commonhold to replace leasehold as the default system for flat ownership in England and Wales.
What Has Not Changed Yet
Ground Rent Ban: Ground rents were effectively banned for new leases under the Leasehold Reform (Ground Rent) Act 2022, which requires ground rent to be zero (or peppercorn) on new leases. However, existing leaseholders with onerous ground rents (particularly those that double every 10 years) have not yet had these retrospectively capped or abolished. This remains a live political issue.
Costs of Lease Extension Post-Reform
While the abolition of marriage value makes sub-80-year lease extensions cheaper, there are still professional costs involved:
| Cost | Typical Range | Notes |
|---|---|---|
| Lease extension premium | £5,000–£50,000+ | Depends on lease, flat value, ground rent |
| Leaseholder solicitor | £1,500–£3,000 | Plus freeholder legal costs |
| Leaseholder surveyor | £1,000–£2,500 | Essential for negotiating premium |
| Freeholder solicitor | £500–£1,500 | Payable by leaseholder under statute |
| Land Registry fee | £20–£500 | Depends on premium paid |
When Should You Act?
If your lease is approaching 80 years, acting sooner rather than later remains important even under the new rules, because a shorter lease still attracts a higher premium (due to higher relativity discounts). The sweet spot remains acting when your lease has at least 85–90 years remaining to keep costs manageable.
If your lease has already fallen below 80 years, the 2024 Act's abolition of marriage value means extending is now significantly more affordable than before. This is the time to instruct a leasehold surveyor and get a valuation.
Frequently Asked Questions
Does the Leasehold and Freehold Reform Act 2024 apply to houses as well as flats?
Yes, though the changes differ slightly. Leaseholders of houses already had the right to extend their lease or buy the freehold under the Leasehold Reform Act 1967. The 2024 Act extends the lease extension term to 990 years for houses (previously 50 years) and removes the requirement for houses to have been let for at least two years before qualifying. The valuation methodology is also reformed for houses.
How long do I need to own my flat before I can extend the lease?
Under the current rules, you must have owned your flat for at least two years before you can serve a statutory notice to extend your lease. This two-year ownership requirement applies from the date you registered as the owner at Land Registry. The Leasehold and Freehold Reform Act 2024 proposes to reduce this to zero (immediate right), but this provision has not yet been commenced as of early 2026 — check for updates on the commencement order.
What is the process for extending a lease under the new rules?
The statutory process involves: instructing a specialist leasehold surveyor to value the premium; instructing a solicitor experienced in leasehold to serve a Section 42 notice on the freeholder specifying your offer; the freeholder has two months to respond with a counter-notice; both parties then negotiate (usually through their surveyors); if agreement cannot be reached, either party can apply to the First-tier Tribunal to determine the premium. The whole process typically takes 6–18 months.
Can I still extend my lease informally (outside the statutory route)?
Yes. You can always approach your freeholder informally to negotiate a lease extension without using the statutory route. This can sometimes be quicker and cheaper, particularly if your freeholder is cooperative. However, informal extensions do not benefit from all the statutory protections, and the term agreed may be shorter than 990 years. Always take legal advice before agreeing to an informal extension.
What is the difference between leasehold and commonhold?
Leasehold means you own your flat for the duration of the lease only — the freehold is owned by someone else (the freeholder or landlord). You pay ground rent and service charges, and the lease diminishes in value over time. Commonhold means you own your flat outright (on a permanent freehold basis), and you and your fellow flat owners collectively own the building and manage it through a Commonhold Association. There is no landlord, no ground rent, and no lease expiry. Commonhold is the system used in most other countries for apartment ownership.
Will the reforms save me money on my lease extension?
For most leaseholders, particularly those with fewer than 80 years remaining, yes — the abolition of marriage value alone can save tens of thousands of pounds. A flat worth £300,000 with 65 years remaining might previously have had a marriage value element adding £20,000–£40,000 to the premium. Under the new rules, this element is entirely removed. Savings will vary significantly based on individual circumstances, so a specialist surveyor valuation remains essential.