Should I wait to extend my lease?

Although the Leasehold and Freehold Reform Act became law in May 2024, most of its provisions haven’t yet come into effect.

To wait or not to wait?

One of the main questions our Leasehold Enfranchisement team is currently being asked by clients is whether or not it makes sense to wait until the secondary legislation is enacted before extending their lease.

This is actually a very difficult question to answer as each leaseholder’s financial situation and legal standing will be different. Furthermore, we have no commencement date for the secondary legislation – although we believe that the changes will come into effect in 2025/2026.  

Below, we have provided some broad guidelines on whether or not it might make sense to wait or go ahead – however, it is highly recommended that you take legal advice.  

Whether or not you should wait to take action depends largely on the time you have remaining on your lease.

More than 85 years – it may make sense to wait. Given that the marriage value (an additional charge due to the landlord of half the property’s increase in value following the completion of a lease extension) applies from 80 years, you can probably afford to wait a few years – although this is not guaranteed. If you are looking to sell or remortgage, different lenders will have varying requirements.

81 to 85 years – whilst the reforms may come into effect before your lease hits 80 years, there is no guarantee. Particularly if you are planning on selling or remortgaging your property in the next few years, it may be advisable to go ahead now. You should consider the implications of slipping below 80 years whilst you wait for the law to change, particularly if you plan to sell. While the marriage value still applies, you will pay more for your lease extension if you allow the remaining term to fall below 80 years.

Fewer than 80 years – if you wait until the secondary legislation is enacted, you will be able to avoid the marriage value. However, you will find it almost impossible to sell or remortgage your property in the meantime.  

Uncertainty means legal advice is vital

As we have mentioned, the lack of clarity around the commencement date for the reforms means that it is impossible to advise with any certainty on your options without a better understanding of your personal circumstances.

To discuss your situation with an expert Leasehold Enfranchisement lawyer, please contact us on 0203 871 0039 or email leasehold@attwaters.co.uk