Short lease extension: extend now or wait for leasehold reform?

Should you extend a short lease now or wait for leasehold reform? For a short lease extension in England and Wales, the answer depends in part on how many years are left. That is the view of Vanessa Griffiths, writing in Mortgage Solutions on 9 September 2026. She is a partner in leasehold reform and litigation at Knight Frank and a member of ALEP (the Association of Leasehold Enfranchisement Practitioners). The dated trigger is a government consultation on valuation rates closing at 11:59pm on 21 October 2026 (GOV.UK). That is a consultation deadline, not a date by which you must act.

What will leasehold reform change, and when?

Griffiths writes that the Leasehold and Freehold Reform Act 2024 (LAFRA) will remove marriage value once its relevant provisions come into force. Marriage value is the extra value released when the freeholder's and leaseholder's interests are merged (GOV.UK). LAFRA will also cap the treatment of ground rent in the valuation and provide 990-year extensions at a peppercorn (zero financial value) ground rent. The ministerial foreword to the consultation puts that ground rent cap at 0.1% of the freehold value (GOV.UK).

When does it take effect? The date is TBC. The foreword says the enfranchisement provisions cannot be commenced until specific flaws in the 2024 Act are fixed through primary legislation. That fix is the Commonhold and Leasehold Reform Bill, "to be introduced in the coming months" (GOV.UK). Griffiths calls it "soon-to-be-published".

The consultation itself, run by the Ministry of Housing, Communities and Local Government (MHCLG), asks how to set the deferment and capitalisation rates. These turn the freeholder's future receipts into today's price (GOV.UK). We covered the consultation in our earlier report on it.

Why do 80 years and the deferment rate matter?

Under the current system, marriage value becomes payable when a lease has 80 years or fewer remaining (Griffiths). That creates an incentive for some leaseholders below 80 years to wait. But Griffiths warns that nobody yet knows where the prescribed rates will land, or exactly when the new regime will take effect.

The current benchmark deferment rate for flats is 5%, she writes. Government modelling she cites shows how sensitive the maths is. For a £250,000 flat with 80 years remaining, moving the rate from 5% to 4% raises the reversion element from £5,044 to £10,846. At 6%, it falls to £2,363. The reversion element is the value of the freeholder's right to take the flat back when the lease ends (GOV.UK).

Griffiths stresses these are illustrative figures and not the total premium. You can model your own lease under today's rules with our free lease extension calculator.

Extend now or wait: which band is your lease in?

Griffiths splits the decision by years remaining. With perhaps 30-80 years left, marriage value can be a substantial part of today's premium, depending on property value and ground rent. A borrower in this range may have a rational financial reason to wait, she says.

Very short leases, perhaps 10-30 years, look different. Today's deferment rate is known; the future one is not. Griffiths says a borrower here "may face a narrower mortgage market before the reforms arrive". There may be value in certainty, particularly if you need to sell or refinance within a set timescale. That matters if you plan to refinance, and our negotiation and finance hub covers mortgage and lender topics.

Above 80 years, say 82 or 85, extending now can remove the risk of falling below 80 while the timetable is uncertain. The current statutory extension adds 90 years to a flat lease, Griffiths notes.

Her bottom line: "'wait for reform' should not become default advice." Nor, she adds, should owners rush into an extension because the future system is uncertain. Lease length can affect marketability and mortgageability. In practice, you may wish to price an extension under today's rules, then weigh it against the possible benefits of waiting.

Key takeaways

• MHCLG's consultation on leasehold enfranchisement valuation rates closes at 11:59pm on 21 October 2026 and covers England and Wales (GOV.UK). It is a consultation deadline, not a deadline to act.

• The Leasehold and Freehold Reform Act 2024 will remove marriage value and provide 990-year extensions once its relevant provisions come into force; the new regime has no commencement date.

• Under the current system, marriage value becomes payable at 80 years or fewer remaining (Griffiths, Mortgage Solutions).

• In government modelling for a £250,000 flat with 80 years left, a 4% deferment rate gives a reversion element of £10,846 against £5,044 at 5%; these are illustrative, not total premiums.

• Griffiths says 30-80 year leases may have a reason to wait, while very short leases and those just above 80 years may value certainty.