Leasehold Conveyancing Checklist

Anything below 80 years remaining is a red flag for two reasons. First, most major mortgage lenders refuse to lend on leases below 70 years. Some require a minimum of 85 years at the end of the mortgage term. Second, although the 2024 Leasehold and Freehold Reform Act abolished marriage value (the formula that made extending a lease below 80 years particularly expensive), extending a short lease still costs many thousands of pounds. Always ask for the exact remaining length from the estate agent and have your solicitor verify it from the title.

New leases granted after the 2022 Leasehold Reform (Ground Rent) Act have zero ground rent capped at a peppercorn. Older leases vary. The most problematic are leases with ground rent that doubles every ten, fifteen, or twenty five years. A doubling ground rent on a flat purchased at £150,000 can grow to thousands per year over the life of the lease, making the property progressively unmortgageable. Check the ground rent clause carefully and confirm the review pattern.

The service charge is your annual contribution to maintaining the building and common areas. It typically covers buildings insurance, communal cleaning, lift maintenance, reserve fund contributions, and managing agent fees. Look at three years of accounts. Has the service charge doubled? Tripled? Is there a reserve fund building up for major works, or is the building's cash position weak? Are there outstanding arrears from other leaseholders, suggesting financial stress in the block?

If the freeholder is planning major works that will cost any leaseholder more than £250, they must serve a Section 20 notice under the Landlord and Tenant Act 1985. Major works can include roof replacement, lift refurbishment, window programmes, or external decoration. These bills can land at £5,000, £15,000, or £50,000 per flat. Ask for the last three Section 20 notices and any planned works that have not yet been formally noticed.

The Leasehold Property Enquiry (LPE1) is a standardised form that the freeholder or managing agent completes with key information about the lease, the building, and the service charge. The LPE1 typically costs £200 to £400 and takes two to four weeks to come back. It is one of the slowest parts of any leasehold purchase, so the LPE1 should be requested the day after instruction. Make sure your solicitor has done this.

Confirm the freeholder or managing agent has buildings insurance in place, who the insurer is, and what the excess is. The insurance must cover the rebuild cost of the property in full. For mortgaged properties, the lender will require a copy of the insurance certificate showing the property is properly insured.

Ask who manages the building. Three common arrangements:

• ●The freeholder manages directly (most common)
• ●A managing agent acts on behalf of the freeholder
• ●The leaseholders have collectively exercised the right to manage and run the building themselves through an RTM company

A leaseholder run building is often better managed but can be more bureaucratic. A freeholder managed building with a known managing agent is the most predictable.

Leases often contain restrictions on what leaseholders can and cannot do without the freeholder's consent. Check the lease for restrictions on:

• ●Subletting or short term lets (some leases prohibit Airbnb style use)
• ●Pets
• ●Structural alterations or installing fitted kitchens
• ●Parking allocation
• ●Use as a home office or business address

Each restriction can usually be released with the freeholder's consent, but that consent often comes with a fee (typically £100 to £500 per consent application).

The 2024 Leasehold and Freehold Reform Act introduced significant changes:

• ●Marriage value abolished for lease extensions
• ●Service charge transparency requirements (standardised accounts)
• ●Right to manage rules relaxed for mixed use buildings
• ●Ground rent capped on new residential leases

Not all provisions of the 2024 Act are in force yet. Some take effect across 2025 and 2026 as detailed regulations are made. Your solicitor will know which apply to your specific lease at completion.

The government has signalled an intention to phase out new leasehold houses entirely (most new houses since 2022 are sold freehold). Commonhold (an alternative to leasehold for flats) is being consulted on but not yet widely used. For now, almost every flat purchase in England and Wales is leasehold and the existing rules apply.

Leasehold work attracts a supplement on top of the freehold legal fee. Typical supplement: £200 to £450 plus VAT. Disbursements include the LPE1 (£200 to £400) plus the standard searches. Allow a total of around £800 to £1,200 extra compared with a freehold purchase of the same value.

Every panel firm we work with handles leasehold transactions with the LPE1 ordered the day after instruction, the lease reviewed in full, and any concerns flagged to the customer in plain English before exchange. The leasehold supplement is named in the original quote so there are no surprise fees later.