Leasehold Reform: What it means for the value of your flat

Recent legislative proposals have brought the topic firmly back into focus for flat owners across England and Wales.

For many leaseholders, one of the biggest concerns is simple: how might these changes affect the value of my property?

While the reforms are still evolving, understanding the factors that influence property value in leasehold buildings can help residents, RMC Directors and RTM Directors make informed decisions.

It is also important to remember that legislation is only one part of the picture. The condition of the building, the strength of financial management and the quality of governance all play a significant role in how attractive a property appears to buyers and lenders.

Why Leasehold Reform is being discussed

The government’s proposed reforms aim to address long-standing concerns around fairness, transparency and control in the leasehold system.

Key proposals include making lease extensions simpler, reducing financial barriers for leaseholders seeking greater ownership rights, and promoting commonhold as a potential alternative structure for flats in the future.

While these reforms are designed to improve outcomes for homeowners, they also create understandable questions around how the market will respond.

There are estimated to be around five million leasehold homes in England and Wales, meaning that any legislative change has the potential to affect a large proportion of property owners and buyers across the country.

For most existing buildings, leasehold will remain the structure in place for the foreseeable future. However, the reforms highlight the importance of understanding how certain leasehold features influence property value.

Lease length remains one of the most important factors

One of the most significant factors affecting the value of a leasehold property is the remaining lease length.

Mortgage lenders and buyers pay close attention to this. As the lease term shortens, particularly once it falls below around 80 years, extending the lease can become more expensive and the pool of potential buyers may reduce.

Research consistently shows that properties with shorter leases can sell at a noticeable discount because buyers factor in the future cost of extending the lease. The closer a lease approaches the 80-year threshold, the more likely it is that buyers and lenders will take this into account when assessing value.

This is one reason why lease extensions feature prominently within the reform agenda. Making the process more accessible may provide reassurance to many leaseholders.

If you are unsure about how your lease works or what the terms mean, it can be helpful to revisit the fundamentals. We explored this in more detail in our article on decoding common lease clauses, which explains how lease wording can affect responsibilities and long-term planning.

Ground Rent and buyer confidence

Ground rent has been another area of focus within the reform programme.

In some leases, escalating ground rent clauses have created challenges for property owners when selling or remortgaging their flat. Buyers and lenders increasingly look at how ground rent terms operate and whether they remain affordable over time.

Proposed reforms aim to simplify and reduce some of these complexities. Greater clarity around ground rent obligations may help improve confidence among both buyers and lenders.

Some studies have suggested that reforms designed to make lease extensions easier could increase the value of shorter leasehold properties by close to 10% on average in certain circumstances, as buyers gain greater certainty around future ownership costs.

However, ground rent is only one element of a much wider picture. The way a building is managed and maintained often has just as much influence on how attractive a property appears in the market.

The growing conversation around commonhold

Leasehold reform has also renewed discussion around commonhold as a potential long-term ownership model.

Under a commonhold structure, flat owners hold the freehold of their individual property and collectively manage shared areas through a commonhold association.

While commonhold already exists within legislation, it has historically been used relatively rarely. The reforms aim to make the structure more practical and attractive for future developments.

For existing leasehold buildings, conversion to commonhold would require agreement among owners and careful planning. It is therefore unlikely to happen overnight, but it remains part of the broader conversation around how residential buildings may be owned and managed in the future.

Why good management still matters

Regardless of legislative change, one factor continues to influence property value more than almost anything else: how well the building is managed.

Prospective buyers often ask questions such as:

• Is the building well maintained?
• Are service charges transparent and reasonable?
• Are reserve funds in place for future works?
• Are compliance responsibilities being properly managed?

Buildings that demonstrate strong governance and clear financial management tend to attract greater buyer confidence.

Market data consistently shows that buyers place significant value on well-managed buildings. Clear financial records, properly maintained communal areas and transparent service charge arrangements can all influence how attractive a property appears during the sales process.

We explored the importance of financial planning in our article on how service charge budgets work, which explains how proper budgeting supports the long-term health of a building.

Similarly, clear communication between directors, managing agents and residents plays a key role in maintaining trust within the block. Our communication in block management guide looks at how transparency can help prevent disputes and misunderstandings.

What RMC and RTM Directors should be thinking about

For resident directors, leasehold reform does not remove the responsibility of managing the building effectively.

If anything, it reinforces the importance of good governance.

Directors should continue to focus on the fundamentals:

• Maintaining accurate financial records
• Planning for future maintenance
• Procuring contractors responsibly
• Communicating clearly with residents

If you are responsible for overseeing works within your building, our recent article Procurement Done Properly – A Spring Checklist for Resident Directors provides a practical framework for approaching contractor selection and maintenance planning.

These operational practices are often the factors that protect property value over the long term.

What buyers are asking more often

Estate agents and conveyancing solicitors are reporting that buyers are becoming increasingly informed when purchasing flats.

Questions commonly include:

• How long is the remaining lease?
• Who manages the building?
• Is there an RMC or RTM company in place?
• Are there any major works planned?

Buyers are not only purchasing a property, they are buying into the management of the building itself.

A well-run block, with clear governance and transparent finances, provides reassurance to both buyers and lenders.

Looking ahead

Leasehold reform represents an important shift in how residential property ownership may evolve over time.

While some proposals may take time to move from legislation into everyday practice, the core principles remain clear: greater transparency, improved fairness and stronger leaseholder confidence.

For existing buildings, the fundamentals of good management will continue to play a significant role in protecting property value.

How JMJ Asset Management can help

At JMJ Asset Management, we work closely with leaseholders, RMC Directors and RTM Directors to ensure residential buildings are managed responsibly and transparently.

Our role includes supporting boards with governance and compliance, managing service charge finances clearly, coordinating maintenance and contractor procurement, and helping residents understand their responsibilities.

As the leasehold landscape continues to evolve, our aim is to provide calm, practical guidance so that clients can make informed decisions about their building.

If you would like to discuss how the changing leasehold landscape may affect your building, or how we can support your board, the team at JMJ Asset Management will always be happy to help.