Residential Property

Leasehold legislation changes

Learn about changes to leasehold legislation

Long-awaited reforms relating to leasehold property came into effect on June 30, 2022.

Over recent years, those who own leasehold properties have had to endure unfair ground rents that increased so much they were unable to sell.

Leaseholders also want the option of extending a lease for more than 90 years, which is currently the maximum available when a lease is increased using the formal statutory process.

The Leasehold Reform (Ground Rent) Act 2022

The Leasehold Reform means that no ground rent payments will be made on new leasehold residential property.


A long residential lease is one that is for a term of 21 years or more. Ground rent in most new leases cannot legally be for anything more than ‘one peppercorn per year’.

Peppercorn rent means that no money can be legally charged or paid as ground rent on leases regulated by the Act.

The Act also prohibits landlords from charging administration fees for collecting a peppercorn rent.

The new act does not apply retrospectively, so it does not affect existing freeholders and leaseholders, but it does cover all new residential leases created on or after June 30, 2022.

Penalties exist for freeholders who break the rules.

In addition, if you negotiate an extension of the lease with a freeholder, they cannot increase the ground rent for the remaining period of the lease and once the new term of the lease is in effect, no ground rent can be charged.

Future leasehold reforms

Currently a lease can be extended by using the formal and statutory lease extension process, with 90 years able to be added using this procedure.

When a lease term falls below 75 years, leaseholders need to start thinking about extending it as mortgage lenders do not generally like to lend on leasehold property when a remaining lease term is below this.

However, the process can be expensive, with leaseholders needing to pay for the extension as well as their legal costs, the freeholder’s legal costs, valuation fees and Land Registry fees.

The government said it intended to change the law so that leaseholders could extend a lease by 990 years.

A standard calculation for working out how much the leaseholder will pay the freeholder would also be brought in.

There has also been talk of the ‘marriage value’ of paying to have a lease extended, being removed. It’s a payment to the landlord where less than 80 years remain on a lease and a leaseholder wants to extend it.

Marriage value is half of the increase in the market value of the property once the lease has been extended.

Leaseholders may also be able to buy their ground rent without the need to extend the term of the lease at the same time.

Here to help

If you need help with a property issue, our property lawyers are here to help you. You can reach them by calling 01772 799 600.


Latest News

Services for You

Services for Business

Get a Conveyance Quote

Need a quote for a residential conveyancing transaction? Try our quick and easy residential conveyancing calculator;

Pay your bill online

Easily pay your bill with us online through our payment portal. Secure and quick card payments through our payment provider World Pay.

Stay in Touch

Stay in touch and up to date with our new focus newsletter

    Man using a laptop to access Marsden Rawsthorn's website

    Contact Us

    Please complete the contact form, and we will get back to you as soon as possible.

    Office Addresses

    3-4 Faraday Court
    Faraday Drive,
    PR2 9NB
    Opening Hours: Monday - Friday:
    9:00am to 5:00pm
    Office 21a,
    Strawberry Fields Digital Hub,
    Euxton Lane,
    PR7 1PS
    Opening Hours: Monday - Friday:
    9:00am to 5:00pm