Leasehold reforms 2026: Should you wait to extend your lease?
- Ricky Coleman
- 6 days ago
- 4 min read
On 29th April 2026, Housing and Planning Minister Matthew Pennycook delivered a keynote speech at the Institute for Government, offering a candid update on the Government’s progress toward leasehold reform. The speech was keenly watched for many looking for updates on when marriage value will be abolished, along with other promised changes the lease extension process and it is fair to say the speech has not gone down very well.
You can watch the full video of the speech here, with the important part being at 00.52 to 17.00 of the video:
While the speech continued to state the Government’s commitment to reform, it also laid bare the practical and legal complexities that could slow the pace of change.
A more realistic picture of reform
For several years, leasehold reform has been presented as a complete overhaul of the system that would be brought about in one fellow swoop. This latest update was notably more measured and suggests a continuing theme of smaller, incremental items of legislation that deal with one area of reform at a time.
Mr Pennycook acknowledged the scale of the challenge in transitioning away from leasehold, particularly in relation to:
The administrative burden on HM Land Registry in restructuring millions of titles
The creation and governance of potentially hundreds of thousands of Commonhold Associations
The impact on lenders, investors (such as pension funds) and the wider mortgage market
Up until now the reporting has been centred on the benefits to flat owners across the country once lease extensions and collective enfranchisement are made cheaper, faster and more efficient. However the mention of the above sticking points indicates that the government is now considering impacts of change on other stakeholders which is likely to complicate things.
The practical challenges of commonhold to replace leasehold
One of the most striking elements of the speech was the recognition that commonhold, while attractive in principle, presents real-world implementation issues.
Converting millions of leasehold properties into commonhold would require:
A complete restructuring of land registration records
The overnight creation of functioning Commonhold Associations with resident directors
Volunteer or professional directors capable of managing buildings from day one
That is before considering disputes, non-participating leaseholders, or mixed-use developments. The administrative and legal infrastructure required is vast.
Key reforms still on the agenda
Despite the sobering tone, the Government remains committed to several core valuation reforms. These include:
Prescribed deferment rates (rather than leaving valuers to fight over rates, as is currently the case)
The removal of marriage value
A cap on ground rent capitalisation at 0.1% of property value
These measures, if implemented, would significantly reduce the cost of lease extensions and enfranchisement claims. It also feels like we have been waiting for these changes for a very long time.
Notably, there had been speculation that these reforms might be delayed pending the outcome of legal challenges to the Leasehold and Freehold Reform Act 2024. However, Mr Pennycook made clear that ongoing litigation will not deter progress.
Understanding the 0.1% ground rent cap
It is important not to confuse two separate concepts that are often discussed together.
The proposed 0.1% ground rent capitalisation rate relates to valuation methodology. In simple terms, it affects how future ground rent income is calculated when determining the premium payable for a lease extension or collective enfranchisement.
This is distinct from the separate draft proposal to cap ground rent payments themselves at £250 per year for a period of 40 years, after which the rent would reduce to a peppercorn.
In short:
The 0.1% cap affects what you pay to extend your lease or buy the freehold
The £250 cap affects what you pay annually in ground rent
The distinction is technical but important, particularly for leaseholders with doubling ground rents or other onerous ground rents.
I am looking to sell my flat, should I wait for the reforms?
The overall message from the speech is one of continued ambition, but with a more cautious timeline.
As Ricky Coleman, founding solicitor at Peppercorn Law, puts it:
“In other words, we are left in a position that will feel familiar to many leaseholders. The direction of travel is clear, but the timing remains uncertain. The question of whether to wait to extend a lease is, if anything, becoming more difficult rather than less.”
For leaseholders, this creates a difficult balancing exercise. Acting now provides certainty, but potentially at a higher cost. Waiting may bring financial benefits, but with no guaranteed timeline and the risk of further delay. A point that is often lost is that the reforms disproportionately affect those that currently pay marriage value over those with more than 80 years on their lease.
A steady series of reforms rather than one headline grabbing date
If there was one clear takeaway from the Minister’s address, it is that leasehold reform is unlikely to be a single, transformative event.
Instead, it is shaping up to be a gradual process, influenced by legal challenges, market realities and administrative capacity.
For leasehold solicitors and leaseholders alike, the focus now shifts from if reform will happen, to when and in what form. Until those questions are resolved, decision-making in this area will remain finely balanced and depend heavily on the specific circumstances of the flat owner in question.
Peppercorn Law takes some of the stress out of the lease extension process by offering a fixed legal fee for an end to end lease extension service.