Leasehold Reforms (Ground Rent) Act, 2022 will be a devastating change in the Industry with the direction the country is moving forward with a view to make a complete Ground Rent to Nil targeting a better future for the buyers and their ownership to be more fairer, transperant, aiming the betterment of the future lease provide biggest change to Leasehold in a generation to the homeowners and leaseholders.

  • Act will not only end up Ground Rent but will be a guiding tool for extension of lease to a longer period with a minimum finacial impact driving up less burdon on the landlords offering a quality standards.
  • The benifit for the new leasehold properties is higher as they are not required to pay their Freeholder Ground Rent which was the case before.
  • Lease Extension is possible for a longer period of time to 990 years in compare to previous Lease extension option for 99,125,999.

There are 5 Million Homeowners witnessing this Change in the Property Industry, Specifically in connection with the leasehold properties, which will be benifitng from that. There are different types of Lease period like 99 years, 125 years, and 999 years with a similarity in terms of Ground Rent and Premium as base to consider for as barrier for a lease holder as they need to pay to freeholder if both the persons are not the same.  

Current studies by the Housing, Communtities and Government Committe Suggests that over a period of time there is a huge increments  in the ground rent even the previous legislation allows the Freeholders and a New Development to increment of the same without any Justification of the said increase and basis of increase would may be not even in line with the standards prescribed , which is a major driving factor for introducing the enactment in line to protect the rights of the Leaseholders and tehe upcoming New Buyers or owner of Lease with an intension to less chances of increase during the period of lease and extension thereof. Currentlt there is a payment of Ground Rent usually to Freeholders which will abolish from 30th June, 2022, which will not only cover leases, but it will also cover Privately, socially engaged Retirement homes in line with the this at a Prospective stage of next reforms driving Government's Mission to level up the Country. 

Period of Lease:

It is crystal clear based on the current legislature in force which was allowing the existing Freeholders to Extend the lease by further 90 years with a payment of Premium (which does has a componenet of Marriage Value) if you hold the exisiting lease was hold for more than 2 years considering the ground rent will extend alongside but after the new enactment the freeholders have a benifit of not only exctend but it would be standard Extension of 990 years with a Ground Rent of Zero where the marriage value also plays and important role where the premium calculation the mrriage value does not counted so it will in return reduce the premium while extending the lease in a new era of 990 years.

Marriage Value 

When Interest of the Freeholders are merged with the interesest of the Leaseholders and their joint interest "Married" into a Single ownership its called Marriage Value: 

Differenciating the above said, Value of the Freehold in single ownership is always higher in compare to Value of both Freehold Interest and Leasehold Interest in Seperate Ownership.

Prima Facie Law Stipulates that where the remaining period of Lease is for more than 80 years it does not fetch more marriage Value resulted into Nil Marriage Value for a consideration , so it will be Equally Devided into Freeholder and Leaseholder.

How do you calculate Marriage Value for Landlords? Assuming you are a Landlord, Prospectively thinking to Buy a Property which has an Existing Lease Period of 99 years and the value is £500,000 so to arrive at per annum cost of lease would be following:

Formula:   Property Cost/ Remaining Lease 

£500000/99= £5050.5 Per Annum , and £420 per month 

£500000/990= £505 Per Annum, and £42.1 Per Month 

Comparing both the parts, before the enactment and after the enactment the situations are better in as the owner will save £378.80 Per month and need to pay just £42.10 per month 

Ground Rent: There are two enforcement Provisions for the said Act, one part is enforcing from 30th June 2022, and other part for Retirement Properties Enforcing from 01st April 2023. Enactment provisions will help the new to exclude Ground Rent and by no means there would be legally charged by the free holders. In Addition, it also prohibits the freeholder owners to levy any administration fees. Considering the abovesaid option to reduce Ground Rent the option is to extend the lease with the current lease arrangement which is covered in the new laws and to come up with amicable solutions with the freeholder for an informal arrangement 

Is there a chance to save in Lease Extension:  By Enforcement of New Legislature, will be impacting both the new lease and buyer and exisitng one as well, as New Home owners and Lease Owners will not pay any Ground Rent but Exising one can do arrange an informal arrangement which is covered in the Act. If you are a leaseholder  and want to reduce your Ground rent, the chance is still that to extend the lease with in the old era with a payment of premium or an extension thereof.  


It is always Better to get this things done through the help of Professional who is qualified enough, as the process is simple but required a little bit of technical awareness which possess by the professional, commenced with Finding your freeholder and have a talk with the qualified Solicitor, who will stay with you for the whole period and will explain the detailed process will not only guide you at a smallest fees but eventually will fetch a good return at the longer period of time  

If you are planning to buy a Leasehold Property, thing to check: 

It s always best to buy straight, considering the lease period is for 990 Years and Nil Ground Rent the price will go up as soon as the new law inforce, Contrary, if the lease period is not 990 years of Ground is there, ask the solicitor to negotiate for you as there are new option with similar benifits but if you failed to negotiate do not try to buy that property as it will not give good value in compare to other properties with 990 years lease and Zero Ground Rent, so better to go with 990 years lease and Zero Ground rent, where Property Hub Can help you buying in the properties with similar requirements. 

Lease Extension: 

Please, Contact the qualified team for a free Conveyancing Quote and other allied information. 

Mortgage On a Leasehold Property:  

Yes, it is available subject to your lease period and Contract, in case you have a lease period for less than 80 years, try to extend it first, if you succeed in that there are highly chances you will get the mortgage subject to checks , where the Estate Agents like us, Property Hub will not only help in Extension of your lease will try to Negotiate with Freeholder and Banking institution for valuation thereof the property will fetch incase required and necessary. 

Checks while buying a Leasehold Property: 

  • Cost Ground Rent, If applicable;
  • The Length of Lease;
  • Service or Maintenance Fees;
  • Restrictive Clause, if any.

Applicability on Shared Owner: This Act Applicable to all Leasehold Properties, in case of shared ownership, Reselling/ Extension thereof is possible through the Freeholder or Housing Association will help in that case. 

If you have any questions, Please speak to Sachinkumar Gupta of Property Hub Limited

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