Leasehold Mortgages: Lease Length, Ground Rent and Reform

Most flats, and some houses, in England and Wales are leasehold. You own the right to live in the home for the length of the lease, while a freeholder owns the land and building. Lenders are happy to lend on leasehold property, but they look closely at three things: how long is left on the lease, the ground rent, and the service charges.

What lenders check on a leasehold home

• Lease length. Many mainstream lenders want at least 70 to 85 years remaining when you apply, and often a set number of years left at the end of your mortgage term, commonly 30 to 40 years. Some specialist lenders accept less.
• Ground rent. Lenders may decline or ask questions if the ground rent is high or rises quickly, for example if it doubles every 10 to 15 years.
• Service charges and major works. These count in your affordability. Large planned works can affect both affordability and value.
• Building safety. For flats in taller or older blocks, lenders may ask about cladding and fire safety, sometimes requiring an EWS1 form or equivalent evidence.

Why short leases are a problem

A lease is usually treated as short below 80 years. Below that point:

• Extending costs more. Under current law, the freeholder is entitled to a share of the “marriage value”, the increase in value the extension creates. This makes extensions noticeably more expensive.
• Fewer lenders. Some lenders will not lend at all, and others reduce the loan.
• Lower value. The home is worth less than a similar one with a long lease, which also affects your future sale.

If you are buying a home with a short lease, ask the seller to start a statutory lease extension before you buy, or agree a price that reflects the cost of extending.

Ground rent: what to look for

On most new leases granted since 30 June 2022, ground rent has been reduced to a peppercorn, effectively zero, under the Leasehold Reform (Ground Rent) Act 2022. Older leases can still carry ground rent. Ask your conveyancer to check:

• The current amount and how and when it increases.
• Whether it is linked to inflation or doubles at fixed intervals.
• Whether the amount is high compared with the property’s value, which some lenders treat as a warning sign.

Service charges and affordability

Service charges pay for building insurance, communal repairs, cleaning and management. Lenders count them as a monthly cost when working out what you can borrow. Before you buy, ask for:

• The last three to five years of service charge accounts.
• The current budget and any reserve fund.
• Any planned major works, such as roof or lift replacement.

Leasehold reform: what has actually changed

The House of Commons Library tracks the reforms. As at its September 2026 update:

Change	Status
No need to own for 2 years before extending or buying the freehold	In force since 31 January 2025
Ground rent reduced to a peppercorn on most new leases	In force since June 2022
990-year lease extensions at a peppercorn ground rent	Not yet in force
Abolition of marriage value	Not yet in force, and subject to a legal challenge
Ban on most new leasehold houses	Passed in law but not yet in force
Cap on existing ground rents at £250 a year	Proposed, likely from late 2028 if approved
Commonhold as the default for new flats	Proposed

The practical point: if you buy a short-lease home today expecting reform to make the extension cheap, you are relying on changes that have not yet happened and have no fixed date. Under current law, a statutory extension for a flat adds 90 years to the existing lease at a peppercorn ground rent, and you can start it as soon as you own the home.

Buying a leasehold home: checklist

1. Check the remaining lease length before you offer.
2. Ask your adviser whether your preferred lenders accept that lease length for your mortgage term.
3. Get the ground rent terms and service charge history from the seller.
4. Ask about major works, building safety and any disputes with the freeholder.
5. If the lease is under 80 years, get a quote for extending it and factor it into your offer.

Buying a new-build flat? Read our new build mortgage guide. Considering Shared Ownership, which is always leasehold? See our Shared Ownership guide.

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