Leasehold vs Freehold · London
Leasehold vs freehold in London — what your lease length means
Around 70% of London flats are leasehold. Most guides explain what leasehold is; this one assesses your lease against the 2026 reform timeline and tells you what it means.
The core distinction
Freehold means you own the building and the land outright. Leasehold means you own the right to occupy for the term of the lease — and when it expires, ownership reverts to the freeholder. In practice most leaseholders extend before expiry, but the mechanism matters because every mortgage lender, every extension surveyor, and every future buyer prices the lease length. The shorter the lease, the higher the cost to resolve it — and below 80 years the cost structure changes materially.
The 80-year cliff, and why it still bites in 2026
When a lease falls below 80 years, the leaseholder must pay the freeholder a share of the 'marriage value' — the uplift in value from extending — as a cash payment on top of the premium and legal costs, and it grows as the lease shortens. The Leasehold and Freehold Reform Act 2024 (LAFRA 2024) passed in May 2024 and includes a provision abolishing marriage value — but that provision has not commenced as of 2026, with government signalling no earlier than 2027–2028 and no confirmed date. Do not act on the assumption it is already in force.
Lease length and what it means in practice (2026)
| Practical impact — mortgage & extension | Fifsee decision read | |
|---|---|---|
| Lease 100+ years | Full lender choice; extension cost low when chosen | Strong — extension is a future option, not a current cost |
| Lease 82–100 years | Good lender access; no marriage value — extension is straightforward | Sound — extend before the lease reaches 82 years |
| Lease 80–82 years | Narrowing lenders; just above the cliff; reform likely 2027–28 but unconfirmed | Act soon — marriage value applies below 80 |
| Lease under 80 years | Restricted lenders; marriage-value premium applies now and grows | Price the extension in full before purchase; use a leasehold solicitor |
Marriage-value abolition (LAFRA 2024) is law but not yet commenced as of 2026; expected no earlier than 2027–2028. Confirm the current legal status with a specialist leasehold solicitor.
The ground-rent escalation trap
Ground rent is the annual fee to the freeholder. Under the Leasehold Reform (Ground Rent) Act 2022, ground rent on most new residential leases granted after June 2022 is a peppercorn (zero). But existing leases with escalating clauses — doubling every 10 or 25 years, or RPI-linked — are still in force, and some lenders refuse to mortgage flats with doubling ground rent above a threshold (commonly £250 a year or 0.1% of value). Check the lease for any escalation clause before you exchange.
What freehold actually costs in London
Freehold houses trade at a real premium to leasehold flats on a like-for-like basis, partly because the leasehold risk is already priced into the freehold. In outer zones a comparable freehold house may be 20–40% more than a leasehold flat; inner-London freehold houses are scarcer and the premium can exceed that. The question is whether the certainty of freehold is worth the difference for your hold period and risk tolerance — which is exactly what a Fifsee read is built to weigh.
Is the leasehold risk priced in? Find out
Tell Fia the lease length, ground rent and purchase price — get a read on whether the leasehold risk is already reflected in the price, or a cost you would be taking on.
Check My Leasehold Risk →Frequently asked questions
Is marriage value still payable on a London lease in 2026?
Yes. The Leasehold and Freehold Reform Act 2024 abolishes it, but that provision has not commenced as of 2026 and is expected no earlier than 2027–2028. Below 80 years, marriage value is still payable — confirm the current status with a leasehold solicitor.
What lease length should I worry about when buying a London flat?
Below 80 years is the key threshold — marriage value applies and lenders narrow. Between 80 and 85 years, plan to extend soon. Above 90–100 years, extension is a future option rather than a current cost.
Can a ground-rent clause stop me getting a mortgage?
It can. Some lenders refuse flats with doubling ground rent or ground rent above roughly £250 a year or 0.1% of value, so read the lease for any escalation clause before you exchange.