The government opened two leasehold enfranchisement consultations on 15 July 2026, both closing at 11:59pm on 23 September 2026. One covers deferment and capitalisation rates for the Standard Valuation Method under the Leasehold and Freehold Reform Act 2024; the other covers exceptions to the future process-cost rules.
The new valuation method is not yet in force, so marriage value can still apply where a lease has 80 years or fewer remaining. Implementation also requires secondary legislation and fixes to the 2024 Act through the forthcoming Commonhold and Leasehold Reform Bill.
The Government Actuary’s Department modelled deferment rates of 6.05% for houses and 6.30% for flats in one exercise using September 2025 data, compared with the prevailing Sportelli benchmarks of 4.75% and 5.00%. These are not final proposed rates.
The two rates that influence the premium
The capitalisation rate discounts future ground rent to produce the term value. The deferment rate discounts the freeholder’s future reversionary interest. A higher discount rate generally lowers the relevant present value.
The government’s example uses a £250,000 flat with 100 years remaining and ground rent starting at £150, rising by £25 every 20 years. At a 6% capitalisation rate and 5% deferment rate, the term value is £2,675 and the reversion £1,901, giving a £4,576 premium before other adjustments. At a 6% deferment rate, the reversion would fall to about £737. Property-condition issues remain separate; see damp, mould and Awaab’s Law.
| Element | Current position | Reform/consultation position |
|---|---|---|
| Deferment rate, houses | Sportelli: 4.75% | Retain, update or alternative |
| Deferment rate, flats | Sportelli: 5.00% | Retain, update or alternative |
| GAD modelling | Not prescribed | 6.05% houses; 6.30% flats in one exercise |
| Capitalisation rate | Case-specific; commonly around 5%–8% | One rate, three rates by rent-review type, or alternative |
| Marriage value | Can apply at 80 years or fewer | Removed when the new regime commences |
| Ground rent in valuation | Current contractual-rent approach | Generally capped at 0.1% of freehold vacant possession value |
Should you wait if your lease is getting short?
Waiting may reduce the eventual premium if the reforms commence on favourable terms, but a shortening lease can become more expensive to extend and may affect saleability or mortgage options. The final Commonhold and Leasehold Reform Bill had not yet been introduced to Parliament by early August 2026, and the government’s High Court victory over challenges to parts of the 2024 Act remains under appeal.
The two-year ownership requirement for statutory lease extensions and certain freehold claims has already been removed. The assured-tenancy ground-rent trap has also ended, although the wider abolition of forfeiture remains proposed rather than in force. Landlords should also consider how guarantors now work in residential tenancies and advice from landlord and tenant eviction solicitors.
Points to consider before deciding
- Check the exact unexpired term. Prescribed rates will apply only to relevant leases with more than five years remaining.
- Review the ground-rent clause, especially where rent is high or escalating.
- Consider any sale, remortgage or passing the flat on under your will.
- Do not assume the future process-cost rule already applies; regulations and limited exceptions are still being consulted on.
- Leaseholders and freeholders can respond through the MHCLG consultation page.
Mixed-use blocks may also involve service charge apportionment, end of lease dilapidations and advice from commercial lease solicitors. Repair claims remain separate from enfranchisement, so housing disrepair solicitors in London can explain how compensation is assessed. For estates, probate solicitors in London can consider a short lease as part of the administration.
FAQs
Is marriage value already abolished?
No. It can still apply under current rules where 80 years or fewer remain. The 2024 Act provides for removal under the new valuation regime, which has not yet commenced.
Are 6.05% and 6.30% the new deferment rates?
No. They are GAD modelling outputs from one exercise. The government is consulting on how the eventual prescribed rates should be set.
Should I extend my lease now or wait?
It depends on the term remaining, ground rent and your plans to sell or remortgage. For an assessment, contact Atalaw Solicitors in North London on 020 3581 9293 and provide a copy of your lease.