Lease Extension 2026: 990-Year Rules and New Costs Explained

If you are searching for lease extension 2026, there is an important distinction to understand: major reforms have already been legislated for, but not every new lease extension rule is operating yet. The Leasehold and Freehold Reform Act 2024 provides for a new statutory right to extend qualifying residential leases by 990 years, with ground rent reduced to a peppercorn. It also provides for the removal of marriage value and changes to the way lease extension premiums are calculated. However, further regulations and implementation steps are required before the new system operates in full.

This matters because someone considering a lease extension today may be wondering whether to act now or wait for the new system.

If you are also considering buying the freehold of your building, YHPM’s guide to how to buy the freehold of your building explains the alternative route of collective enfranchisement.

What is changing with lease extensions in 2026?

The biggest proposed change is the length of the statutory lease extension. Under the existing system, qualifying flat owners generally have a statutory right to add 90 years to their lease. The 2024 Act provides for this to become a 990-year extension for both flats and houses. The new extended lease would also have a peppercorn ground rent, meaning no financial ground rent would normally be payable under the extended lease.

The reforms also change the valuation system. The legislation provides for the removal of marriage value and introduces a cap on the treatment of ground rent in the valuation calculation at 0.1% of the freehold value. However, it is important not to assume that every leaseholder can simply apply for a 990-year extension under the new rules today. The implementation process is still being developed. For a broader overview of the reforms, you can also read YHPM’s Leasehold Reform 2026 guide.

Is the 990-year lease extension law yet?

The 990-year right is contained in the Leasehold and Freehold Reform Act 2024, but the new enfranchisement system has not yet been fully brought into operation. This distinction is extremely important.

The government is currently consulting on the valuation rates that will be used under the new Standard Valuation Method. The consultation was updated on 7 September 2026 and is currently open for responses. The government is also consulting on the process-cost arrangements that will apply to enfranchisement claims. That consultation is scheduled to close on 23 September 2026. So, in September 2026, the safest way to describe the position is:

The 990-year lease extension is part of the 2024 legislation, but the new system still requires further implementation before leaseholders can use all of the new rights and valuation rules.

The government’s own plain English leasehold reform explainer confirms that further work is required before the changes go live.

How will a 990-year lease extension work?

Under the reforms, a qualifying leaseholder will be able to extend their lease by 990 years rather than receiving the current statutory extension period. For a flat, that could fundamentally change the long-term position of the property. Instead of repeatedly worrying about the lease falling towards a shorter term, the leaseholder would have a very long remaining term following the extension.

The extended lease is also intended to have a peppercorn ground rent.

Current statutory system	New system under the 2024 Act
Flat generally receives an additional 90 years	990-year extension
Ground rent continues under the statutory extension	Peppercorn ground rent
Marriage value can apply in qualifying cases	Marriage value removed
Existing valuation methodology	New Standard Valuation Method
Landlord’s costs can be relevant	New process-cost framework

The new system should therefore provide greater long-term certainty, but the premium payable will still depend on the valuation rules and individual circumstances.

Will lease extension be cheaper in 2026?

The reforms are intended to make lease extensions cheaper in many cases, particularly where marriage value currently has a significant impact. The government’s September 2026 explainer says the new law removes marriage value costs and caps the ground rent used in the valuation calculation at 0.1% of the property’s value. It also says leaseholders will generally pay their own process costs rather than the freeholder’s, subject to specified exceptions.

However, this does not mean every lease extension will suddenly become cheap. The eventual premium can still depend on factors including:

• the value of the property
• the length of the existing lease
• the ground rent
• the valuation assumptions
• the applicable statutory rates
• professional fees
• the individual circumstances of the claim

The government is currently consulting on the deferment and capitalisation rates that will form part of the new valuation method. That means anyone searching for a definitive lease extension cost 2026 figure should be cautious. There is no single price that applies to every flat.

What happens if my lease has less than 80 years left?

The 80-year point has traditionally been extremely important when considering lease extensions because marriage value can significantly affect the premium under the existing system. Under the new legislation, marriage value is intended to be removed from the valuation calculation.

That is potentially a major change for owners with shorter leases. However, it does not mean that a short lease becomes irrelevant. A lease with 60 years remaining is still very different from one with 120 years remaining. The remaining term can affect marketability, mortgage lending and the premium required to extend the lease. If your lease is approaching or has already fallen below 80 years, do not assume that waiting for the new system is automatically the best option. The right decision depends on your circumstances and the timing of implementation.

YHPM’s freehold purchase service can also be relevant where a group of leaseholders is considering buying the freehold rather than pursuing individual lease extensions.

Should I extend my lease now or wait?

This is one of the biggest questions surrounding lease extension 2026. There is no universal answer. Waiting could potentially provide access to the new 990-year system and the removal of marriage value once the relevant provisions are in force.

But waiting also carries potential risks. Your property could continue to have a shortening lease, and the eventual premium under the new system will depend on the valuation framework and rates that are ultimately prescribed. The government is still consulting on those rates, which means it would be premature to calculate every future lease extension premium using assumptions that have not yet been finalised. If you are considering an extension, get professional advice based on your actual lease rather than making the decision purely because a reform has been announced.

You can also review YHPM’s Freehold Purchase guide if several leaseholders in your building are considering collective enfranchisement.

What information do I need before extending my lease?

Before discussing a lease extension, gather the basic information about your property.

You will normally want to know:

Information	Why it matters
Years remaining	A key factor in valuation and marketability
Current ground rent	Relevant to the existing and future valuation position
Property value	Used in calculating the premium
Lease terms	Establishes your rights and obligations
Ownership details	Helps establish the applicable procedure
Building information	Important where collective issues are involved
Professional costs	Solicitor, valuer and other costs need to be budgeted

The government has also confirmed that the new legislation will change the way process costs operate, although exceptions are being consulted on. For anyone managing a wider residential development, understanding these changes is also important because lease extensions can affect individual owners while the building continues to require effective management.

YHPM provides residential block management for developments where leaseholders, RMCs and freeholders need professional support with the day-to-day running of their building.

What happens to ground rent after a lease extension?

Under the new statutory system, the extended lease is intended to have a peppercorn ground rent. In practical terms, this means the leaseholder would not normally continue paying a financial ground rent under the extended lease.

This is different from the question of whether existing ground rent must be paid before the extension takes place. The government’s current reform programme also contains separate proposals affecting ground rents, so leaseholders should distinguish between ground rent under an existing lease, ground rent during an enfranchisement valuation, and ground rent under the new extended lease.

If ground rent is one of your concerns, YHPM’s services page explains the wider property management and freehold services available to leaseholders and resident-led organisations.

Could buying the freehold be better than extending the lease?

For some buildings, yes. A lease extension deals with the lease attached to your individual property. Buying the freehold is a different process and generally involves qualifying leaseholders collectively acquiring the building’s freehold. Collective enfranchisement can give participating leaseholders much greater control over the building and can also allow the management structure to change.

It is not automatically the better option, though. The cost, eligibility requirements, number of participating leaseholders and structure of the building all need to be considered. YHPM’s guide to buying the freehold explains the process in more detail.

What does lease extension reform mean for block management?

Lease extension reform is not just a legal issue for individual flat owners. Residential blocks still need effective management regardless of whether individual leases are being extended. Buildings require:

• maintenance and repairs
• insurance
• service charge budgeting
• contractor management
• compliance
• financial reporting
• resident communication
• planned maintenance
• major works management

For RMCs and leaseholder-controlled buildings, these responsibilities can become particularly important when owners are also dealing with freehold or leasehold changes.

YHPM’s block management costs guide explains what professional management can cost and what services should be considered when comparing managing agents.

If your building is considering a change of managing agent at the same time as dealing with leasehold issues, YHPM also provides block management performance support to help assess whether the existing management arrangement is delivering the required standard.

Does lease extension reform apply to London, Kent and Essex?

The 2024 Act and the current enfranchisement reforms apply to England and Wales, so the statutory changes are relevant to qualifying leaseholders in London, Kent and Essex. However, the practical management issues surrounding a building can vary significantly by location and development type.

YHPM provides block management in London, supporting RMCs, RTM companies, freeholders and leaseholders across Greater London.

For developments in Kent, YHPM also provides block management in Kent, while its Essex team provides block management in Essex. The lease extension itself is a specialist legal and valuation matter, but professional block management can remain important before, during and after the process.

What should leaseholders do now?

If you are considering a lease extension in 2026, do not make the decision based solely on headlines about 990-year leases. Instead, establish:

1. how many years remain on your lease;
2. what ground rent you currently pay;
3. the approximate value of your property;
4. whether you qualify for the relevant statutory process;
5. whether you need an extension urgently;
6. what professional costs may apply;
7. whether buying the freehold could be a better option; and
8. how the current and future valuation rules could affect your premium.

The government’s current consultations are important because the valuation rates and process-cost rules will help determine how the new system works in practice. The valuation-rates consultation is currently scheduled to close on 21 October 2026.

If you are unsure which route makes sense for your building, YHPM can discuss the management and freehold side of the decision. You can contact YHPM for advice about your building and its current management arrangements.

Final Thoughts

The lease extension 2026 reforms could represent one of the biggest changes to leasehold ownership in England and Wales for decades. The headline change is straightforward: qualifying leaseholders are set to gain a statutory right to extend their lease by 990 years, with a peppercorn ground rent. The removal of marriage value and changes to the valuation system could also make extending shorter leases more affordable in many cases.

But the important word right now is implementation. The legislation has established the direction of travel, but the government is still consulting on valuation rates and process-cost arrangements. That means September 2026 is a particularly important time for leaseholders to understand what has actually changed, what has not yet taken effect and whether waiting is appropriate for their individual circumstances.

If your lease is becoming a concern, or your building is considering freehold purchase and a change in management, speak to the YHPM team about your options.

Contact Your Home Property Management to discuss your building and find out how YHPM can support leaseholders, RMCs and residential developments across London, Kent and Essex.

Frequently Asked Questions