Shall I Wait for Leasehold Reform Before Selling My Short Lease Flat?

Thinking of selling your flat with a short lease? This guide weighs up the pros and cons of selling now versus waiting for leasehold reform to come into effect.

If you are thinking of selling a flat with a short lease, you may be wondering whether now is the right time, or whether it would be wiser to hold on and wait for leasehold reform to come into effect.

The proposed Leasehold and Freehold Reform Act (LAFRA), which was passed in the final days of the last UK Parliament before the July 2025 General Election, aims to make lease extensions cheaper and fairer. But as things stand, the Act is not yet in force, and full implementation could take months or even years.

Why Short Leases Matter

A "short lease" usually refers to a lease with less than 80 years remaining. This is a critical threshold in leasehold law because of something called "marriage value".

Once your lease drops below 80 years, the cost of extending it increases significantly, because you have to pay marriage value to the freeholder, a charge based on the idea that your flat becomes more valuable once it has a longer lease.

In many cases, short leases can make a property harder to sell or mortgage. Buyers are often wary, especially if they will need to pay to extend the lease themselves after purchase.

What Does LAFRA Change?

The Leasehold and Freehold Reform Act 2024 to 25 (commonly referred to as LAFRA) is part of a package of reforms designed to make leasehold ownership simpler, fairer and more affordable. For leaseholders with short leases, some of the headline changes include:

• Abolition of marriage value, potentially reducing the cost of extending a lease that is under 80 years.
• Capping of ground rent: premiums for lease extensions will assume a ground rent of 0.1% of the property value, or possibly zero in some cases.
• Standardisation of 990-year lease extensions, reducing the need for future renewals.
• Simplification of the process, including potential removal of freeholder legal costs and the introduction of prescribed formulas.

These changes could result in significant cost savings, especially for leaseholders with leases under 80 years or with high ground rents. However, not everything is settled yet.

What is the Catch? Delays and Uncertainty

Although the Act has been passed, it is not yet in force, and many of the key reforms will require secondary legislation, public consultation and regulatory guidance. This means:

• The law will be implemented in stages, not all at once.
• Full implementation could be delayed until 2025 or 2026, or possibly even later.
• Some of the most important valuation assumptions, such as the deferment and capitalisation rates used to calculate lease extension costs, have not yet been set.

In short, nobody knows for certain whether the cost of extending your lease will definitely be cheaper under the new regime, or when those savings might materialise.

Selling Now: The Pros and Cons

Pros of selling now

1. Certainty. You know exactly where you stand under current legislation. You can get a valuation, extend if needed, and sell with confidence.
2. No delay in your plans. If you need to move for work, family or financial reasons, waiting may not be practical.
3. Avoid further lease decay. Every year that passes reduces your lease length. If your lease drops below key thresholds (e.g. from 82 to 79 years), the value of your flat could fall sharply.
4. Market conditions may be favourable. Interest rates, local demand or seasonal trends might make this a good time to sell.
5. Buyers are still active. Some cash buyers and investors are willing to buy short-lease flats now, especially in high-demand areas.

Cons of selling now

1. You may lose out on future savings. If LAFRA comes into force and abolishes marriage value, the cost of extending could drop significantly.
2. Buyers may negotiate harder. In the current uncertain environment, buyers might try to knock down the price, citing the short lease and pending legislation.
3. You may have to extend first. In many cases, your buyer (or their lender) may insist that you extend the lease before they complete, especially if the term is below 70 to 75 years.
4. Potential lower sale price. Properties with short leases often fetch less, and extending now under current rules can be costly.

Waiting for Reform: The Pros and Cons

Pros of waiting

1. Potentially lower lease extension costs. Especially if your lease is under 80 years or you pay high ground rent, you could save thousands under the new rules.
2. Avoiding marriage value. This could be a major win for leases currently under 80 years, as marriage value can add 10 to 30% or more to the premium.
3. Simplified extension process. The reforms may remove the need to pay the freeholder's legal costs and may reduce disputes over valuations.
4. Increased buyer confidence. Once the reforms are in force, buyers may feel more secure about the leasehold system and be more willing to proceed.

Cons of waiting

1. Uncertainty and delay. No one knows exactly when the reforms will be implemented, or what the final version will look like. It could take until late 2025 or even 2026.
2. Your lease will get shorter. Every year you wait may reduce the value of your flat, particularly if it drops below 80, 75 or 70 years.
3. Buyers may still be hesitant. Even with the reforms, buyers may still be cautious about flats with leases under 70 years.
4. You may need to move anyway. If your personal circumstances change, waiting could become a costly delay.
5. Some reforms may not apply to all leases. For example, the 0.1% ground rent cap may not apply in all cases, and the removal of marriage value may not always lead to savings depending on how rates are set.

What Should I Do?

You might want to sell now if:

• You need to move in the next 6 to 12 months.
• Your lease has just dropped below 80 years and you want to extend now to avoid further value loss.
• You have already extended the lease and are simply looking to sell.
• You have urgent financial or life circumstances that make waiting impractical.

You might want to wait if:

• Your lease is well below 80 years, and you are not in a rush to sell.
• You have a high ground rent, which could be capped under the new rules.
• You expect to save significantly on marriage value if you delay.
• You are confident the reforms will benefit your specific lease type.

Final Thoughts: Risk vs Reward

Waiting for reform can be tempting, especially if you are facing steep costs to extend your lease now. But reform is not guaranteed to save everyone money, and in the meantime, your lease is getting shorter.

If you are thinking about selling soon, your best first step is to get an expert valuation and legal advice. A qualified leasehold practitioner or solicitor can help you understand your lease length and ground rent terms, estimate the cost of extending now versus later, decide whether your flat is mortgageable as it is, and weigh up your personal and financial priorities.

For some sellers, the best move is to act now and sell with certainty. For others, it may make sense to wait and watch how the reforms unfold. Either way, knowledge is power, and getting good advice early can help you make the most informed decision possible.