Leasehold Ground Rent Valuation Rates Consultation Closes 23 September 2026

Last updated: September 20, 2026

Quick Answer

The MHCLG consultation on leasehold enfranchisement valuation rates closes on 23 September 2026. It asks how the deferment rate, capitalisation rate and a market-value cap should be set under the Leasehold and Freehold Reform Act 2024, replacing the long-standing Sportelli benchmarks. The outcome will directly change how much leaseholders pay to extend a lease or buy a freehold, and how much freeholders receive for their ground rent income [1][2].

Key Takeaways

• The consultation on leasehold enfranchisement valuation rates runs until 23 September 2026 and covers the deferment rate, capitalisation rate and a proposed cap on market value [1].
• These rates decide how much a leaseholder pays a freeholder when extending a lease or buying the freehold outright, small changes to the rate can mean large changes to the premium [2][4].
• The draft Leasehold and Commonhold Reform Bill was published on 27 January 2026, running alongside the rates consultation [3][5].
• The High Court dismissed freeholder legal challenges to the reforms on 24 October 2025, clearing a path for the valuation changes to proceed [9].
• No specific rates have been fixed yet, the whole point of the consultation is to decide them, so treat any figure quoted online before the government response as speculative [1][4].
• Surveyors, valuers, leaseholders and freeholder representative bodies are all invited to respond via gov.uk before the deadline [1][6].
• After 23 September 2026, MHCLG will analyse responses and publish a government response before secondary legislation sets the final rates [1][5].

Leasehold ground rent valuation rates consultation closes 23 September 2026 UK: key dates

The consultation deadline of 23 September 2026 sits at the end of a fast-moving reform timeline that began with the Leasehold and Freehold Reform Act 2024. Anyone with an enfranchisement claim in progress, or planning one, should treat this date as a genuine decision point rather than a bureaucratic formality.

The sequence of events that brought the reforms to this stage:

Date	Event
24 October 2025	High Court dismissed freeholder-led legal challenges to the 2024 Act's valuation reforms [9]
27 January 2026	Draft Leasehold and Commonhold Reform Bill published, extending the reform programme [3][5]
Ongoing 2026	MHCLG consultation on deferment rate, capitalisation rate and market-value cap runs
23 September 2026	Consultation closes [1]
After closing	Government response, then secondary legislation to fix the rates

The High Court ruling is significant because it removed a major obstacle: freeholder investment funds had argued the reforms breached their property rights, and the court's rejection of that challenge on 24 October 2025 gave government the confidence to press ahead with rate-setting [9]. The draft Bill published on 27 January 2026 confirms the direction of travel toward commonhold as the long-term replacement for leasehold, but the rates consultation is the more immediate concern for anyone with a live enfranchisement matter [3][5].

What is leasehold ground rent valuation

Leasehold ground rent valuation is the process of putting a present-day monetary value on a freeholder's right to receive ground rent, and sometimes a reversionary interest, over the remaining term of a lease. Valuers use a discount rate, the deferment rate, and a capitalisation rate to convert future income and a future reversion into a single lump sum payable today.

In practice this happens whenever a leaseholder wants to:

• Extend their lease (paying a premium to add years and often reduce ground rent to a nominal amount)
• Buy the freehold outright (enfranchisement), where the premium reflects the freeholder's lost ground rent income and reversionary value
• Have a collective enfranchisement claim valued for a whole block

The premium is not arbitrary. It comes from a formula that combines the ground rent stream, the length of the lease remaining, and the rates chosen by the valuer, which is precisely what this consultation is trying to standardise [2][4].

Why is the UK government consulting on ground rent rates

The government is consulting because the Leasehold and Freehold Reform Act 2024 created a new Standard Valuation Method for enfranchisement but left the actual rates to be set separately, informed by expert analysis rather than case law [1][2]. Without fixed rates, valuers and courts would continue relying on outdated precedent that many campaigners argue inflates premiums unfairly.

For decades, valuations have leaned on the 2007 Sportelli Court of Appeal decision, which set benchmark deferment rates still used as the working default today [4]. Critics say Sportelli reflects market conditions from nearly two decades ago and does not account for how ground rent income streams and reversion values have moved since. The 2024 Act gives the Secretary of State power to prescribe rates by regulation instead, and the Government Actuary's Department (GAD) has been commissioned to provide technical analysis to support that decision [1][2].

The consultation exists to test GAD's emerging analysis and the government's proposed approach against real-world views from leaseholders, freeholders, surveyors and investors before rates are locked into law.

What changes are proposed in the 2026 ground rent consultation

The consultation sets out options for three connected mechanisms rather than a single fixed number, because deferment rate, capitalisation rate and a market-value cap interact with each other in the premium calculation [1][2].

• Deferment rate: the discount applied to the value of the freeholder's reversionary interest (getting the property back at the end of the lease), reflecting risk and the time value of money.
• Capitalisation rate: the rate used to convert an ongoing ground rent income stream into a single capital sum.
• Market-value cap: a proposed ceiling on how deferment and capitalisation rates can push valuations above a reasonable open-market comparison, intended to prevent outlier outcomes.

The Act also confirms the removal of marriage value from enfranchisement calculations, the additional value historically added when combining freehold and leasehold interests on shorter leases, which the consultation's rate choices interact with directly [2][4]. No specific percentage figures have been confirmed; GAD's analysis is informing the range of options put to consultees, but the final rates depend entirely on this process concluding [1][4].

How does ground rent valuation affect leaseholders

Ground rent valuation affects leaseholders because it is the main driver of the premium charged to extend a lease or buy a freehold. A lower deferment or capitalisation rate generally reduces the premium a leaseholder must pay; the reforms are broadly expected to bring rates down compared with current Sportelli-based practice, though by how much remains undecided [4][7].

Key effects to understand:

• Lease extensions: leaseholders extending under the new statutory scheme should see ground rent reduced to a peppercorn (effectively zero) as part of the deal, with the premium calculated using whichever rates are eventually confirmed.
• Freehold purchase (enfranchisement): the price paid to buy out the freeholder depends heavily on the capitalisation rate applied to existing ground rent income and the deferment rate applied to the reversion.
• Freeholders: investors and freeholder companies whose income is capitalised under these rates face lower expected returns if rates move in leaseholders' favour, which is why some freeholder groups pursued the legal challenge dismissed in October 2025 [9].

A useful rule of thumb: the lower the deferment and capitalisation rates set, the lower the premium a leaseholder typically pays, and the lower the compensation a freeholder typically receives.

What were the old ground rent valuation methods

Before the 2024 Act's Standard Valuation Method, enfranchisement valuations relied on case law precedent, most notably the 2007 Sportelli decision, combined with tribunal practice built up over years of individual disputes [4]. This approach gave valuers a working benchmark but also produced inconsistency, since tribunals sometimes departed from Sportelli rates depending on the specific evidence in each case.

Marriage value also formed part of the old method for leases with fewer than 80 years remaining, adding a further layer of cost that the 2024 Act removes entirely [2][4]. The shift to a Standard Valuation Method with prescribed rates is designed to replace this fragmented, case-by-case system with one clear formula applied consistently across England and Wales.

Who needs to respond to the ground rent consultation and how to submit feedback

Anyone with a direct stake in enfranchisement valuation should consider responding, including practising leaseholders, freeholders and investment funds, chartered surveyors, valuers, solicitors specialising in property, and representative bodies such as leaseholder and freeholder associations [1][6]. RICS members and firms carrying out lease extension or enfranchisement work have a particular professional interest in shaping how the Standard Valuation Method will operate in practice.

Responses are submitted through the consultation page on gov.uk, which sets out the specific questions on deferment rate options, capitalisation rate options and the proposed market-value cap [1]. Given the technical nature of the questions, many firms are preparing formal written responses referencing the GAD analysis rather than informal comments, since ministers will weigh the evidence and reasoning behind each submission when drafting the final regulations.

Are all leaseholds affected by the new valuation rates, and which are exempt

Not every leasehold arrangement is affected. The new Standard Valuation Method and its rates apply specifically to statutory lease extension and enfranchisement claims under the reformed framework, not to every leasehold transaction in general [1][2].

Situations generally outside the immediate scope include:

• Commercial leases, which sit under separate valuation and rating guidance [8]
• Leases already completed under the old rules before new rates take effect
• Certain community-led or charitable housing arrangements with separate statutory treatment

Leaseholders and freeholders with claims still in progress should check with a specialist surveyor whether their case will be valued under the old benchmarks or the new rates once confirmed, since timing of the claim relative to the regulations coming into force matters significantly.

How much will ground rent increase under new valuation rates, and should I buy before or after 23 September 2026

Ground rent itself is not expected to increase under these reforms; if anything, statutory lease extensions push ground rent down to a peppercorn. The consultation is about the rates used to value that ground rent for premium calculations, not about permitting higher rent charges [1][2]. No specific figures should be quoted as confirmed, because the consultation's purpose is to determine them.

For anyone weighing whether to act before or after the rates are finalised:

• Consider acting now if you have a lease with a low number of years remaining and marriage value currently applies, since delaying could mean waiting many months for final regulations with no guaranteed personal benefit.
• Consider waiting if early indications (once published) suggest new rates will reduce your likely premium meaningfully, and your lease term gives you room to hold off without urgent risk.
• Get a professional valuation under both scenarios, current Sportelli-based rates and the range of options under consultation, so any decision is based on real numbers rather than assumption.

Buying a leasehold property itself remains entirely possible and lawful after 23 September 2026; the consultation does not pause property transactions, only the rate-setting process behind future enfranchisement premiums.

Ground rent vs service charges: what's the difference

Ground rent and service charges are separate payments with different legal purposes, and the valuation consultation only concerns ground rent. Ground rent is a periodic payment to the freeholder simply for holding the lease, while service charges cover the actual cost of maintaining and running the building or estate [2].

• Ground rent: paid to the freeholder, historically nominal but increased sharply in many modern developments before the Leasehold Reform (Ground Rent) Act 2022 capped new ground rents at a peppercorn.
• Service charges: paid to whoever manages the building (freeholder or management company), covering repairs, insurance, cleaning and communal costs, and variable year to year based on actual expenditure.

The valuation rates consultation affects the capital value attached to ground rent income and reversions. It does not change how service charges are calculated or challenged, which remains a separate area of leasehold law.

What happens if the consultation deadline passes

Once the consultation closes on 23 September 2026, MHCLG will analyse all submissions and publish a government response setting out its decisions on the deferment rate, capitalisation rate and market-value cap [1]. This response is expected to be followed by secondary legislation formally fixing the rates in law.

There is no fixed statutory deadline forcing an immediate government response, so a gap between the consultation closing and final rates coming into force is likely. During that gap, valuers will typically continue using current Sportelli-based benchmarks for live claims, unless government guidance says otherwise. Leaseholders and freeholders with claims in progress should monitor gov.uk and House of Commons Library briefings for the government response, since it will clarify exactly when and how new rates apply to pending cases.

What surveyors and valuers should watch for in the response

Surveyors and valuers should focus on three things once the government response is published: the final numeric ranges chosen for deferment and capitalisation rates, how the market-value cap is defined and applied, and any transitional provisions for claims already submitted before the new regulations take effect [1][2].

Practical points for professional practice:

• Watch for whether the response adopts GAD's central analysis or a modified version influenced by consultation responses [1].
• Check transitional arrangements carefully, claims notice-served before commencement may be valued under different rules than claims started after.
• Update valuation software and precedent files promptly once final rates are confirmed, since continuing to apply Sportelli defaults after new regulations commence would produce incorrect premiums.
• Advise clients realistically that estimates given before the government response are indicative only, not fixed figures.

Practical guidance for leaseholders considering acting now

Leaseholders weighing action before final rates are confirmed should get independent advice tailored to their specific lease term, ground rent level and local market rather than relying on general commentary. A short lease with marriage value currently in play carries more urgency than a lease with a long unexpired term.

A sensible checklist:

• Establish your unexpired lease term and current ground rent through your lease documents.
• Instruct a RICS-qualified valuer for an indicative premium under current rules.
• Ask the same valuer to model a range of outcomes based on the rate options under consultation.
• Weigh the cost of waiting (mortgage or resale complications from a short lease) against the potential saving from new rates.
• Keep a record of the consultation timeline so any claim notice can reference the correct valuation basis at the time it is served.

FAQ

When does the leasehold ground rent valuation rates consultation close?
The consultation closes on 23 September 2026, after which MHCLG will review responses and publish a government response before final rates are set in regulations [1].

Has the government already decided the new deferment and capitalisation rates?
No. The consultation exists specifically because these rates have not been fixed; any figures circulating online before the government response are speculative, not confirmed [1][4].

Does the consultation affect service charges as well as ground rent?
No. It concerns the valuation rates used for ground rent and reversionary interests in enfranchisement premiums, not service charge calculation or disputes [2].

Can I still extend my lease or buy my freehold while the consultation is open?
Yes. Claims can still proceed under current valuation practice, typically based on Sportelli benchmarks, while the new rates are being finalised [4].

Will the High Court ruling affect the outcome of the consultation?
The High Court's dismissal of freeholder challenges on 24 October 2025 removed a legal obstacle to the reforms proceeding, giving government a clearer path to implement new rates once decided [9].

Who should respond to the consultation?
Leaseholders, freeholders, chartered surveyors, valuers and property law specialists with an interest in enfranchisement valuation are all encouraged to submit responses via gov.uk before the deadline [1][6].

Conclusion

The 23 September 2026 deadline marks the point where the government stops gathering views and starts finalising the numbers that will decide enfranchisement premiums for years to come. Nothing about the final deferment rate, capitalisation rate or market-value cap is settled yet, and treating any online estimate as confirmed would be a mistake [1][4].

For leaseholders with a live or pending claim, the practical next step is to get an independent valuation now under current rules, then ask a RICS-qualified surveyor to model likely outcomes under the range of options on the table. Freeholders and investment funds should review how capitalisation of their income might change and take professional advice on portfolio implications. Surveyors and valuers should flag the consultation to affected clients, track the government response closely once published, and be ready to update valuation practice as soon as final regulations commence. Acting on accurate, current advice, rather than waiting on unconfirmed numbers, remains the safest course through the remainder of 2026.

References

[1] gov.uk consultation - Leasehold Enfranchisement Valuation Rates
[2] Impact Assessment (PDF)
[3] Peppercorn Law - Leasehold Reform Latest
[4] Leasehold Knowledge Partnership
[5] commonhold.property
[6] Cripps - Enfranchisement Consultations Overview
[7] Property118 - Landlord Impact Analysis
[8] gov.uk Rating Manual (commercial leases)
[9] Judiciary.uk - Arc Time Freehold ruling (PDF)