Whatever Happened to Marriage Value?

In May 2024 Parliament legislated to abolish marriage value. Almost two and a half years on, leaseholders who extend their lease or buy their freehold with 80 years or less remaining still pay it. The Leasehold and Freehold Reform Act 2024 rewrote the price rules in the Leasehold Reform Act 1967 (houses) and the Leasehold Reform, Housing and Urban Development Act 1993 (flats). But the new valuation rules have never been switched on, and as at October 2026 the old rules, marriage value included, still apply to every claim.

Four things stand in the way. First, the valuation changes only take effect when the government makes commencement regulations, and it has not done so. Second, the government says the Act contains flaws that only a new Act of Parliament can fix. Third, the valuation rates the new formula depends on have not yet been set. Fourth, a legal challenge by some of the country’s largest freeholders, which the government won in the High Court in October 2025, is now on appeal. This article explains each obstacle, where things stand and what it means if your lease is getting shorter.

What is marriage value?

Marriage value is the extra value released when a leaseholder’s interest and the landlord’s interest are brought together. A flat on a short lease is worth noticeably less than the same flat on a very long lease. When the lease is extended (or the freehold bought), that gap closes, and the uplift is the “marriage value”.

Under the current rules, the price for most statutory lease extensions and freehold purchases is made up of three elements:

1. The value of the landlord’s ground rent income for the rest of the term.
2. The value of the landlord’s right to get the property back when the lease ends (the “reversion”).
3. Where the lease has 80 years or less left to run, half of the marriage value.

That third element is why the 80-year mark matters so much. Since the Commonhold and Leasehold Reform Act 2002, marriage value is disregarded once more than 80 years remain. Once the term drops to 80 years or less, the premium can jump sharply, and it keeps climbing as the lease shortens. For leaseholders of flats with 60 or 70 years left, marriage value is often the single largest part of the bill.

Marriage value is also the most contested part of any valuation. It depends on the “relativity” between short-lease and long-lease values, which has kept surveyors, tribunals and the courts busy for years (most notably in Sloane Stanley Estate v Mundy in 2018).

What the 2024 Act changed (on paper)

The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024, in the “wash-up” rush after the July 2024 general election was called. Sections 35 to 37 and Schedules 4 to 7 replace the old price formula in both the 1967 Act and the 1993 Act with a single new method. Together with related changes elsewhere in the Act:

• Marriage value goes completely. The valuer must assume the leaseholder is not seeking to buy the freehold or a new lease (Schedule 4, paragraph 17(3)), so there is no marriage value to share, whatever the length of the lease.
• The 80-year cliff edge disappears. With no marriage value, a lease with 60 years left no longer carries the extra cost it does today.
• High ground rents are capped for valuation purposes. Ground rent is taken into account at no more than 0.1% of the freehold vacant possession value (Schedule 4, paragraph 26).
• The key rates will be fixed by government. The deferment rate and the capitalisation rate, the two percentages that drive most valuations, will be prescribed in regulations rather than argued case by case.
• Leases can be extended to 990 years at a peppercorn rent, instead of the current 90 years for flats and 50 years for houses.
• Each side pays its own costs. Leaseholders would generally no longer pay the landlord’s legal and valuation fees.

Taken together, the government says these changes will make enfranchisement cheaper, simpler and less contentious. For leases below 80 years, removing marriage value is by far the biggest saving.

Some other parts of the Act are already in force. Since 31 January 2025, for example, leaseholders no longer need to have owned their lease for two years before making a claim. But the valuation changes, including the abolition of marriage value, are still marked “prospective”: written into law, but not in force. So are the 990-year extension and the new costs rules.

Why hasn’t it happened?

1. An Act may contain provisions which are yet to be implemented

Most of the 2024 Act only takes effect when the Secretary of State makes commencement regulations (section 124). Ministers have used that power to switch on other parts of the Act, such as the end of the two-year rule and the right to manage changes. No regulations have been made for the valuation provisions. Until they are, sections 35 to 37 and Schedule 4 sit on the statute book with no effect on any claim.

2. The Act has flaws that need a new Act to fix

The 2024 Act was completed in a hurry before Parliament was dissolved. In November 2024 the Housing Minister, Matthew Pennycook, told Parliament it contained “a small number of specific but serious flaws”. One was “a loophole which means the Act goes far beyond the intended reforms to valuation and that undermines the integrity of the amended scheme”. Another was an omission that would deny tens of thousands of shared ownership leaseholders a lease extension from their direct landlord.

The loophole the government has acknowledged in court concerns intermediate leases (Schedule 4, paragraph 17(2)), and it accepted that it “needs to be corrected by primary legislation”. Regulations cannot cure it: Parliament has to pass another Act.

The government’s chosen vehicle is the Commonhold and Leasehold Reform Bill. A draft Bill was published on 27 January 2026, but the fixes were left out of it. The full Bill was announced in the King’s Speech on 13 May 2026, and the government says it will be introduced “in the coming months”. At the time of writing it has not reached Parliament. In the minister’s words, “we cannot commence these enfranchisement provisions without rectifying a small number of specific flaws in the 2024 Act through primary legislation.”

3. The valuation rates have not been set

The new formula depends on two percentages that the Act leaves to the government to prescribe:

• The deferment rate, used to value the landlord’s right to get the property back at the end of the lease.
• The capitalisation rate, used to value the ground rent income.

When the freeholders’ claims were before the High Court in October 2024, the court recorded that “no decision has yet been made about how those rates should be set”. The Secretary of State would not give a timescale, and the judge observed that preparing the commencement provisions was “likely to take many months, if not years”.

In November 2024 the government promised to consult on the rates “next summer”, meaning summer 2025. The consultation actually opened a year later, on 15 July 2026. It was extended by four weeks and now closes at 11.59pm on 21 October 2026. For the deferment rate, it asks whether to keep the long-standing Sportelli rates (5% for flats, 4.75% for houses) or update them. The Government Actuary’s Department’s updated estimates were 6.3% for flats and 6.05% for houses, though the government is not consulting on those figures. For the capitalisation rate, it notes that tribunal decisions mostly fall between 6% and 7%, but proposes no figure. The rates would then be fixed for up to ten years at a time.

4. The freeholders went to court

Six groups of freeholders brought judicial review claims, including the Cadogan and Grosvenor estates, large ground rent investment funds and two charities. They argued that three of the Act’s changes breach the right to peaceful enjoyment of property under Article 1 of Protocol 1 to the European Convention on Human Rights:

• abolishing marriage value
• capping ground rent in the valuation at 0.1% of freehold value
• ending the leaseholder’s liability for the landlord’s costs

After a four-day hearing in July 2025, the Divisional Court (Lord Justice Holgate and Mr Justice Foxton) rejected the claims on 24 October 2025. The court treated the reforms as a change to the compensation landlords receive when a leaseholder exercises their rights, rather than a new taking of property, and held that Parliament was entitled to make that change.

The freeholders did not give up. On 1 April 2026 the Court of Appeal reportedly gave permission to appeal on all seven grounds, and a hearing is expected in late 2026 or early 2027.

Even so, the litigation is not a legal bar to switching the reforms on. The freeholders are seeking a “declaration of incompatibility” under section 4 of the Human Rights Act 1998, and such a declaration does not affect the validity or operation of an Act. It would put the question back to Parliament. The government has said it will “defend any appeals just as tenaciously” and is “continuing to implement the 2024 Act” in the meantime. In practice, though, an unresolved appeal adds uncertainty that any government would weigh before switching the reforms on.

Timeline: from promise to (still) pending

Marriage value has been “about to go” for almost six years. The key dates:

What has to happen next

The government’s position is clear: it intends to abolish marriage value. In April 2026 the Housing Minister said it would set the rates well before the fixes are made, so that it can then “swiftly implement a new valuation process that removes the requirement for marriage value to be paid”. But several steps remain, roughly in this order:

1. The Commonhold and Leasehold Reform Bill is introduced and passed. It must carry the fixes to the 2024 Act. The minister has described it as likely to run to around 260 clauses and 20 schedules. A Bill of that size usually takes many months to pass both Houses.
2. Regulations are made. These will prescribe the rates, switch on the valuation provisions and set transitional rules, including what happens to claims already under way.
3. The appeal runs in parallel. The Court of Appeal hearing is expected in late 2026 or early 2027, with the possibility of a further appeal to the Supreme Court. The litigation cannot strike the Act down, but its outcome may influence timing.

No date has been announced. On a realistic view of the steps above, we think it unlikely that the new valuation rules will apply to claims before late 2027 at the earliest, and they may come later. Until the switch is flipped, every claim is valued under the existing rules, and marriage value remains payable on any lease with 80 years or less to run.

Should you wait, or act now?

There is no single answer. It depends on how long your lease has left, whether you need to sell or remortgage, and how much risk you are comfortable with. The points below are a starting framework, not a substitute for advice on your own lease.

If your lease has well over 80 years left, marriage value does not apply to you today. The main thing to avoid is drifting below 80 years while you wait for reform. Do not assume the new regime will automatically be cheaper either. Much depends on the rates the government chooses. Some commentators have modelled scenarios in which, if the deferment rate were set below today’s level, leaseholders with 80 to 150 years left could pay more under the new formula than they do now.

If your lease is approaching 80 years, acting before it passes that point removes marriage value from the calculation altogether under the current rules. The valuation date is the date your formal notice is served, so a claim made with 81 years left is valued as an 81-year lease, even if the process runs on after the 80-year mark passes.

If your lease already has 80 years or less, waiting could produce a significant saving if and when the reforms arrive. Weigh that against the risks:

• The price keeps rising. Every year that passes increases the premium under the current rules, and the rise steepens as the lease gets shorter.
• The timing is unknown. There is still no commencement date, and every step outlined above could slip.
• The detail is unknown. The rates have not been set, and the outcome of the appeal and the final terms of the fixing legislation are not yet known.
• Selling and mortgaging get harder. Many lenders are cautious about shorter leases, which can affect your ability to sell, remortgage or achieve full market value.
• Transitional rules are unknown. We do not yet know how claims already in progress will be treated when the new rules start. A flat owner who withdraws a claim generally has to pay the landlord’s costs incurred so far and cannot serve a new notice for 12 months.

If you are selling, a buyer’s lender may require a longer lease. Under the 1993 Act a flat owner can serve a formal notice and assign the benefit of it to the buyer on completion, locking in the current valuation date for them.

Consider a voluntary deal, carefully. Some landlords will negotiate outside the statutory process, and the prospect of reform may affect what they are willing to accept. Voluntary extensions can, however, include unfavourable terms such as rising ground rents, so get the lease terms checked as well as the price.

Whatever your position, a valuation that sets out the likely premium under both the current rules and the reformed regime, together with an honest view of timing, is the best basis for deciding.

The bottom line

Marriage value has been abolished by Parliament, but not yet in practice. Until the government fixes the 2024 Act, sets the valuation rates and makes the commencement regulations, the old rules apply in full. For many leaseholders the right decision is to act now; for others it may be worth waiting. What matters is making that choice deliberately, with clear figures, rather than by default.

How we can help

Thirsk Winton LLP advises leaseholders on lease extensions, freehold purchases of houses and collective enfranchisement of blocks of flats. We work with specialist valuers to model the likely cost under the current rules and the reformed regime, and we keep our clients updated as the reforms progress.

If your lease is approaching or below 80 years, or you are planning to sell or remortgage, please contact our leasehold enfranchisement team at shortlease@thirskwinton.co.uk.

This article is for general information only and reflects the law at the date of publication. It is not legal advice and should not be relied on as such. For advice on your own circumstances please contact us.