Housing secretary announces leasehold reform

apartment buildings

A long-awaited reform of property law in England has been announced by the Housing Secretary, Robert Jenrick, including leasehold reform with new rights and protections for leaseholders in England.

Properties in England are most often sold freehold or leasehold. A freeholder owns both the land and the property, while the leaseholder owns the property but not the land.

Under the current law, leaseholders have been made to feel that they do not own the property they live in, even though they paid a mortgage. Owners of freeholds could increase the ground rent on a whim, often with no benefit to the homeowner.

High ground rents and short leaseholds also make it difficult to sell the property.

Leasehold extensions

The leasehold reform means that leaseholders of both flats and houses will be able to extend their leasehold by up to 990 years, which has previously been limited to just 90 years. Extending the leasehold has previously been costly but a new cost cap is to be introduced.

An online calculator will help leaseholders decide whether to extend their lease or buy the property’s freehold.


Mr Jenrick said that leasehold costs and bureaucracy represented some of the ‘worst practices faced by homeowners’.

Leaseholders will no longer pay ground rent if they choose to extend the leasehold on their home and will save thousands of pounds in costs if they choose to do so.

Ground rent will no longer be payable on new build properties, which will provide protection for both new leasehold homebuyers as well as the elderly, who will no longer pay ground rent on new retirement leasehold properties. However, protection for retirement properties will only come into force twelve months after Royal Assent.

The ‘marriage value’ will also now be abolished. The term is used when one party owns both the leasehold and the freehold of a property, thus giving them a greater interest in the property than if they held a separate interest. Marriage value forced leaseholders to share any potential profit from leasehold extension with the freeholder.

Commonhold leases

Commonhold leaseholds were introduced in 2002 but they are rarely used. Commonholders own their property outright but jointly form a management company that shares responsibility for the building with no division between leasehold and freehold.

A Commonhold Council is now to be established that will encourage homeowners and the property market to increase the take up commonholds. The council will comprise leasehold groups, as well as representatives from industry and government.

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