Homeowners could save £1,000s if a new leasehold reform proposal is passed

Fingers crossed

A new leasehold reform could save millions of homeowners looking to extend their lease or buy their freehold £1,000s.

Related: Can you guess what's on the top of Rightmove's buyers wishlist? It may surprise you...

The proposal published by the Law Commission, an independent legal body, on Thursday outlined changes to lease extension and freehold purchase. These will not only simplify the process but also cut the overall cost.

Leasehold reform proposal

If you own a leasehold property you are probably all too aware of the potential money-pit falls of extending a lease or purchasing your property's freehold. In recent years more and more homes have been sold as leaseholds.

stairs with lamp and frame

(Image credit: Future PLC/David Merewether)

If your lease is creeping towards 80 years you will probably be dreading it. Under this length not only does the property become harder to sell, but you are liable to pay 'marriage value' on top of the costs of the lease extension.

Unfortunately, extending a lease is not straight forward. It can take a long time and you can end up shelling out £1000s on legal advice and paying the freeholder.

Increasingly homeowners are opting to buy a property's freehold to avoid increasing ground rent, or if the current freeholder isn't maintaining a building well. However, this can end up costing homeowners over £10,000. Taking months to go through.

dining table with flower vase

(Image credit: Future PLC/David Merewether)

The new scheme proposes removing the marriage value and another premium called 'hope value' from the cost of purchasing a freehold.

The Law Commission has estimated that this could cut the cost of purchasing a freehold by £6,000. It will also wipe out the added expense of increasing a lease.

table with chair and laptop

(Image credit: Future PLC/David Merewether)

If you own a leasehold property this will be music to your ears. However, before you get too excited, the changes are still a long way off.

The reforms are still in the proposal stage and it is now up to the Government to consider them.

Related: How long should you stay in a home before moving? And how long have you lived in your property?

Our fingers and toes are crossed that these reforms become a reality before our leasehold hits the 80-year mark.

Rebecca Knight
Deputy Editor, Digital

Rebecca Knight has been the Deputy Editor on the Ideal Home Website since 2022. She graduated with a Masters degree in magazine journalism from City, University of London in 2018, before starting her journalism career as a staff writer on women's weekly magazines. She fell into the world of homes and interiors after joining the Ideal Home website team in 2019 as a Digital Writer. In 2020 she moved into position of Homes News Editor working across Homes & Gardens, LivingEtc, Real Homes, Gardeningetc and Ideal Home covering everything from the latest viral cleaning hack to the next big interior trend.