
Flat owners have received a significant boost following a groundbreaking legal change that allows them to extend their leases immediately, without waiting two years before applying.
Lease extensions not only protect property values but also make homes easier to sell. Under the Government’s latest reforms to leasehold and freehold law, leaseholders who apply for an extension will now automatically receive a 990-year lease with a nominal "peppercorn" ground rent.
Leasehold properties typically lose value over time due to their diminishing lease term and the financial burden of ground rent—charges that often increase significantly every few years. This reform is a game-changer, enabling leaseholders to extend their leases sooner, eliminate ground rent obligations, and secure their property’s long-term value.
Strada PR client Mike Somekh, founder of the Freehold Collective, welcomed the change as a "huge relief" for leaseholders stuck in unfair contracts with escalating costs.
“It could increase the value of a property by up to 15% for those with less than 70 years remaining on their lease,” he explained.
A longer lease is also crucial for securing a mortgage, as most lenders are reluctant to approve loans for properties with leases shorter than the mortgage term.
Somekh highlighted the unintended consequences of the previous two-year rule, which was originally designed to deter property investors from quickly flipping leasehold properties for profit. However, it inadvertently trapped many homeowners, forcing them to wait two years before they could extend their lease—often at a much higher cost while continuing to pay ground rent.
“The abolition of this rule will benefit tens of thousands of leaseholders who can now take action immediately,” he said.
Prospective buyers will also find the market more accessible. Previously, buyers often required sellers to start the lease extension process before completion, which added costs and frequently caused deals to collapse.
Despite this positive step, Somekh warned that challenges remain. He pointed to the mounting backlog at the Land Registry, which has made proving property ownership—a key requirement for lease extension—an increasingly difficult process.
Registrations that once took weeks now take years, even as Land Registry fees have surged by 233%.
Overall, scrapping the two-year waiting period marks a significant victory for leaseholders and aligns with the Government’s broader promise to make homeownership more affordable, accessible, and fair.
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