Our Response to Leasehold Reform

Monday, 11th January 2021 | by: Peter Barry

Following on from the Law Commissions Consultation and recommendations the Housing Secretary Robert Jenrick has announced “the biggest reforms to English property law for 40 years, fundamentally making home ownership fairer and more secure”.

Peter Barry Surveyors have been fighting the corner for Leaseholders since 2010 and know too well the stress caused by massive bureaucracy and a system that seems to consistently be tilted in favour of wealth Freeholders.

After considering the announcement in more detail, our experienced team have concluded that whilst this is another good step in the right direction, some elements are not as favourable as they seem whilst others lack the detail to be able to make a confident assessment on their impact:

Extending leases to 990 years

Leaseholders already have the right to extend by 90 years. There is a nominal difference to the value of a property with a 130+ year lease or a 990 year lease.

There is also no mention of dropping the 2 year ownership rule for lease extensions (which is not applicable for freehold enfranchisement).

Abolishing Ground Rents

Leaseholders already have the right to reduce their rent to peppercorn.

Abolishing Marriage Value

Whilst the most ambitious proposal in terms of reducing premiums*, there is no further detail.

Freeholder’s would be set to lose billions of pounds so there are likely to be challenges in the form of legal action.

Marriage Value could be replaced with something else (all be it more favourable).

* Making up around 50% of the premium on a property with a 60 year lease.

Leases greater than 80 years

Marriage Value is not currently payable above this length, so the opportunity for cheaper premiums is significantly reduced.

Online Calculator

The Government has mentioned an online calculator to determine premiums, but the rates and inputs are not clear.

If Marriage Value is abolished, making premiums cheaper, some of this could be clawed back with rate changes linked to the property’s value (Deferment) or ground rent (Capitalisation).

Removing Development Value from Freehold Enfranchisements

Many Leaseholders acquire their freehold in order to undertake development works, the most typical being a loft extension. We understand that any compensation would be removed from the calculation by having the Leaseholder’s bared from undertaking future developments.

It is not clear how this would work in practice. Any Leaseholders wishing to undertake works once they had purchased the freehold, would still need to undertake a similar exercise, paying a similar premium to the other share of freeholders.


We take “this Parliament” to mean before the next general election which is May 2024.


Whilst this is a significant move forward for leaseholders, the devil will still be in the detail.

Leaseholders in who have started the extension process can withdraw their claim, but will need to pay their own and their freeholder’s costs to date. It is not clear what future costs will look like.

Leaseholders with leases above 80 years strand to gain the least. Those below, should see savings but exactly how much is still unknown. Ultimately our client’s personal circumstances, urgency and attitude to risk will be the deciding factor in whether to wait or proceed with a claim based on the existing legislation.

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