Current law and proposed reform
The introduction of the Leasehold and Freehold Reform Act 2024 (LAFRA) is set to bring significant changes for leaseholders and property owners across England and Wales. The Act increases the statutory lease extension term from 90 years to 990 years, abolishes marriage value, and ensures that all extended leases carry only a peppercorn (£0) ground rent. In addition, the Government has proposed introducing a £250 per annum cap on ground rent for existing leases. This cap is intended to protect leaseholders who still pay ground rent under historic leases that predate the Leasehold Reform (Ground Rent) Act 2022. The proposal has not yet come into force, but once implemented, it will apply only to existing leases that continue to attract ground rent, ensuring no leaseholder pays more than £250 annually. New or extended leases will continue to be restricted to a peppercorn (£0) ground rent. Once the Act comes into force, it is expected to impact the overall cost of extending a lease, potentially making the process more affordable for many leaseholders.
Looking to extend a lease? Try our Leasehold Extension Calculator for an Estimated Cost
Ground rent and other considerations when buying leasehold property
Many lenders apply strict criteria to lease terms on purchase. Typical requirements include a minimum unexpired term (commonly more than 80 years at completion and/or exceeding the mortgage term by a specified margin), and lender‑acceptable ground‑rent clauses (no doubling or aggressive indexation; for post‑2022 new “regulated” long leases, peppercorn rent is expected). Lenders also assess building‑safety and management arrangements (for example, EWS1/fire‑risk documentation where relevant, clear service‑charge machinery and adequate buildings insurance). Policies vary by lender and product and can change over time.
Here are some tips to consider when buying leasehold property
- As the leaseholder, you will be required by the lease to pay ground rent, service charges, management fees and buildings insurance to the landlord or their appointed managing agent, on top of any mortgage repayments, utility bills. Such charges may vary from year to year. Ask for recent service‑charge accounts, budgets and any major‑works notices (for example, Section 20 consultation) to understand true running costs and likely future expenditure (reserve funds).
- Be clear who the landlord is and whether they have a managing agent acting for them. In some cases, there may also be a management company involved in running the site as a whole and you may need to make payments for different charges to different people. Where there is a management company it may also have its own managing agents and may make its own charges on you as leaseholder, which will increase the overall costs that you have to pay while owning the property. Check the lease’s service‑charge/insurance clauses are lender‑compliant (clear apportionment, enforcement, reserve fund powers, and landlord/agent rights of access).
- Before viewing any leasehold property always check the length of the lease remaining with your solicitor. Be aware that sometimes a leasehold property may seem cheap, but that is because the length of the lease is short (often approaching or below 80 years). Most mortgage lenders won’t lend on short leases which limit who the property can be sold to, i.e. cash buyers If the number of years left on a lease goes below 80 it is more expensive to extend it, as the landlord is then allowed to charge the tenant something called “marriage value” which can increase the cost of any lease extension dramatically. Therefore, if you are looking to purchase a property with a short-lease, it is vital that you negotiate with the seller to agree on a purchase price that reflects the situation. Since removal of the historic two‑year ownership requirement, a buyer can generally start a statutory lease extension claim immediately after purchase (in practice, on the day of completion), rather than waiting two years. In transactions involving a short lease, the agreed sale price will usually need to reflect the buyer’s likely total costs and risks—typically the statutory premium (including marriage value if the term is 80 years or less at the valuation date), the buyer’s and landlord’s “reasonable” legal and valuation fees, and any lender‑driven timing requirements.
- Always check the description and plans of the property within the lease carefully against the physical layout. If there are any discrepancies you must alert your chosen lawyer as soon as possible. Any discrepancies can have serious consequences and can be expensive and time-consuming to correct. It is vital to have any amendments made by the seller at their expense and before you purchase the property (for example, by deed of variation or, where substantial, by a deed of surrender and regrant/replacement lease). Confirm all rights you will rely on (access, bin/bike stores, parking, roof/terrace use) are expressly granted in the lease and supported by plans.
- Ground rent and rent reviews: For most new “regulated” long residential leases (post‑30 June 2022), ground rent must be peppercorn; if a monetary or escalating rent appears, treat it with caution. For existing leases, check the review mechanism and projected rent path; avoid frequent doubling or aggressive index‑linking. Where terms are unacceptable, consider a deed of variation as part of your offer or reflect the issue in price.
- Fire and building safety: In relevant buildings, ask for EWS1 (if applicable), the latest fire‑risk assessment/report and evidence of compliance with current Building Safety legislation. Lenders and buyers may not proceed without satisfactory documentation.
- Sub‑letting, pets, alterations and use: Ensure the lease permits what you intend (for example, long‑term letting only; short‑lets often prohibited). If past alterations were carried out, confirm licences/consents and completion certificates are available.
- Negotiation “smart points”: Use due‑diligence findings to negotiate sensibly—price reductions; obtain a deed of variation to cap/peppercorn the ground rent; remedy a lease defect; provide missing consents). Align exchange/completion with these deliverables and specify who pays which landlord/agent fees.
How we can help
Starck Uberoi Solicitors have many years of experience dealing with leasehold purchases; our solicitors will be on hand to guide you through every stage. We are CQS‑accredited, on the panels of major lenders, and use secure digital onboarding (ID/AML, e‑signatures) to accelerate timescales. You can also obtain an Instant Purchase Quote in minutes via our online quote calculator, showing legal fees, expected landlord/agent fees Land Registry fees and SDLT estimates.
Our Offices
Our Brentford Solicitors, are located on the High Street in a grand three-story building, just a short distance from Brentford County Court. Our Belgravia solicitors are located Just a 5-minute walk from Victoria tube station in Grosvenor Gardens. Our Ealing solicitors are only a short walk from both Ealing Broadway and South Ealing and our Richmond Solicitors have the pleasure of overlooking the picturesque Richmond Green. Finally, our Solicitors in Canterbury are located in the within the UNESCO World Heritage Site of Canterbury Cathedral. Our partner, Raminder Uberoi, can also offer a Notary Public Service at any of our London offices.
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