Equity Release on Leasehold Property 2026: What the Government Toolkit Means for You

What is the Government's Leasehold Toolkit?

Published on 20 May 2026, the Government's Leasehold Toolkit is a practical guide to the Leasehold and Freehold Reform Act 2024 and the draft Commonhold and Leasehold Reform Bill. It sets out, in accessible terms, the rights available to leasehold homeowners and the process for using them.

The Toolkit covers four main areas: lease extensions, ground rent abolition, service charge transparency, and the pathway to commonhold. For flat owners in particular — the majority of leasehold properties in England — the extension rights are the most immediately useful.

Under the 2024 Act, leasehold homeowners can request a lease extension at any time. For flats, the standard extension is 90 years added to the existing unexpired term, with ground rent reduced to a peppercorn (effectively zero). The Toolkit makes clear how to start this process, what costs to expect, and what protections are in place.

Why lease length matters for equity release

Equity release lenders — providers of lifetime mortgages — will only lend against a leasehold property if the unexpired lease term meets their minimum requirement. These minimums vary by lender, and they are not uniform. The key thresholds currently applied by major providers are:

• Legal & General: minimum unexpired term of 185 years
• Aviva: minimum unexpired term of 160 years
• Hodge: minimum unexpired term of 90 years or more
• More2Life / Just Retirement: minimum unexpired term of 75 years

These figures are indicative and subject to change — always verify current criteria with a specialist adviser. The key point is that lender appetite for leasehold properties varies significantly, and the minimum term required can be far higher than many flat owners expect.

A flat with 80 years remaining on the lease would be declined by all four providers listed above. The same flat with the lease extended to 170 years could release equity with some lenders but not others. And a flat extended to 250 years opens access to the full market.

How the 2024 Act simplifies the path to equity release

Before the Leasehold and Freehold Reform Act 2024, lease extension involved a formal legal process with qualifying conditions, including a two-year ownership requirement. The 2024 Act simplifies and strengthens these rights, removing barriers that previously delayed or prevented extensions.

For homeowners aged 55 and over who are considering equity release, this change matters directly. If your lease is currently too short to meet equity release lender criteria, the revised extension rights make it more straightforward to extend before applying. The Toolkit provides the practical roadmap for doing so.

Extending a lease takes time — typically several months — and incurs legal and valuation costs. But for homeowners whose lease has fallen below lender thresholds, extending first and then applying for equity release is a well-established route. The 2026 Toolkit makes that first step easier to navigate.

The scale of the opportunity: five million leasehold properties

There are approximately five million leasehold properties in England. A significant proportion are flats, and a significant proportion of those are owned by people aged 55 and over — the cohort for whom equity release is relevant.

Many of these homeowners have built up substantial property wealth but hold it in a form that requires specialist advice to unlock. Equity release on a leasehold property is possible — but it is not straightforward, and lender requirements vary enough that taking advice from a specialist who understands the leasehold landscape is essential.

Verity Home works with clients holding leasehold properties. We understand the lease length requirements of different providers, and we can help you identify whether your property qualifies as it stands, whether a lease extension would open up more of the market, and what sequence of steps makes most sense for your situation.

What to do next if you own a leasehold property

If you are aged 55 or over and own a leasehold flat — particularly one where the lease has been diminishing — there are three useful steps to take now:

Check your unexpired lease term. Your lease documents will show the original term and start date. Subtract the years elapsed to find the unexpired term. If you are unsure, your solicitor can confirm this quickly.

Understand the equity release threshold for your property. With a lease length in hand, a specialist adviser can tell you which lenders would accept your property and, if the term is too short, by how much you would need to extend to qualify.

Consider a lease extension before applying for equity release, if needed. The 2024 Act rights and the 2026 Toolkit guidance make this process clearer than it has ever been. A solicitor experienced in leasehold law can guide you through the extension; a specialist equity release adviser can ensure the extension is sized appropriately for the lender market you want to access.