The government’s drive to reform leasehold by making it cheaper to extend leases could lead to less housing affordability because of the resulting increase in property values, a study has found.

The King’s Speech last month outlined reforms to leasehold, including extending the standard lease extension from 90 to 990 years with zero ground rent. The government also pledged to make it “cheaper and easier for existing leaseholders in houses and flats to extend their lease”.

Rachel McLean earlier this month, while housing minister, confirmed the government will look to do this by including measures to scrap ‘marriage value’ in its Leasehold and Freehold Reform Bill. This is a premium paid by the leaseholder to the freeholder when extending leases of less than 80 years and is calculated on the increased market value of the property due to the longer lease.