When the Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024, the property press wrote the obvious story: leaseholders win, freeholders lose, ground rents die. The headline was correct. It was also the least interesting thing about the law.
The interesting part is the gap between the Act passing and the Act working. Most of its valuation machinery — the part that actually moves prices — was left to commence by secondary legislation. Two years on, much of it still has not (LEASE commencement guidance, 2026). That gap is where Prime Central London's clearest mispricing now sits.
What the Act actually changed
Three provisions matter for capital, not comfort.
First, the abolition of "marriage value" — the premium a leaseholder must pay a freeholder to extend a lease that has fallen below 80 years. Below that line, the cost of extension jumps, sometimes by six figures. The Act removes marriage value entirely (Leasehold and Freehold Reform Act 2024).
Second, a standard lease extension moves from 90 years to 990 years, with ground rent reduced to a peppercorn. The asset stops decaying on a clock.
Third, the valuation basis for the premium is capped and standardised, stripping out the freeholder's discretion that made short-lease extensions unpredictable to underwrite.
Read together, these turn a sub-80-year lease from a wasting, hard-to-finance asset into something close to a freehold-equivalent. On paper, a large block of PCL stock is due a one-time re-rating.
Why nothing has repriced yet
Because the market is pricing the law it can use today, not the law on the statute book.
A buyer extending a 78-year lease in Knightsbridge this quarter still pays marriage value. The abolition is enacted but not commenced; conveyancers cannot rely on it; lenders will not underwrite against it. So short-lease flats continue to trade at the old, punitive discount — as if the reform never happened.
That is the dislocation. The discount reflects a regime that Parliament has already voted to dismantle. The only open question is timing.
The data points to one place
Short leases are not spread evenly across London. They cluster where the freeholds are old and concentrated — the great estates of Prime Central London.
Land Registry price-paid data shows the heaviest concentration of sub-80-year residential leases in six postcodes: SW1, SW3, SW7, W1, W8 and NW8 (Land Registry, 2025). Savills puts the share of PCL flats with leases under 80 years at roughly one in five of the leasehold stock in those districts (Savills Research, 2025). Knight Frank's lease-length analysis finds that flats with leases between 60 and 80 years trade at a 14-22% discount to an otherwise identical long-lease unit — a spread that has widened, not narrowed, since the Act passed (Knight Frank, 2025).
Widened. That is the tell. Uncertainty over when the reforms commence has made buyers more cautious about short leases, not less — even though the eventual direction of travel is fixed in law.
The trade, stated plainly
Buy the asset the market is mispricing because of a timing question, when the timing question has a known answer.
A sub-80-year PCL flat bought today carries a discount built for a regime that is being abolished. An investor who acquires now, holds through commencement, and extends under the new basis captures the difference between the punitive premium priced in and the standardised premium the Act delivers. LonRes already records a thinning of supply in the 60-80 year band in Q1 2026 as better-informed buyers move first (LonRes, Q1 2026).
The risk is not direction; it is duration. Commencement could slip another year, and capital is not free. So this is a thesis for patient money — family offices and long-duration private wealth — not for anyone who needs the re-rating on a 12-month view. It rewards the investor who can underwrite the legal outcome and wait for the calendar.
What would break the thesis
Two things, and both are knowable. The first is a legal challenge to the abolition of marriage value itself. Freeholders — including some of the same great estates — have argued the change is an uncompensated transfer of value and tested it on human-rights grounds. If a court forces a compensation mechanism back in, part of the re-rating narrows. The second is political drift: commencement is a ministerial decision, and a reform with no champion can sit on a shelf for years. Neither risk changes the direction of travel; both change its duration. That is why this is underwriting, not speculation — you are pricing how long, not whether. An investor who cannot hold through a slipped commencement date should not be in this trade at all.
The uncomfortable part
Most buyers will keep avoiding short leases until the day commencement is announced — and then pay up, in a crowd, for an edge that was available, quietly, for two years. The reform was written in public. The opportunity is hiding in the commencement schedule, which almost nobody reads.
London is no longer bought by postcode. It is bought by strategy — and, occasionally, by reading the footnotes.