It’s been just over a year since the The Leasehold and Freehold Reform Act 2024’s commencement – so what changes have been enforced since then?
This Act represented a significant move towards transparency for the leasehold sector, building on the earlier restrictions of the Leasehold Reform (Ground Rent) Act 2022. In the eyes of many, these reforms have been long overdue, and in the eyes of many in the government, not yet far enough.
This has led to announcement of yet more leasehold reforms for the future, with the production of the Commonhold White Paper, and intent from the Labour government for a “Draft Leasehold and Commonhold Reform Bill in this Parliamentary session”.
If you’re wondering what has been implemented from the Leasehold Reform Act, the changes to the law agreed by Parliament, and details about future leasehold plans – then keep on reading.
Our comprehensive guide will help you understand how the rules about leasehold property are due to change – as well as explaining the various delays and complexities which have hampered the process.
What is the Leasehold Reform Bill?
The Leasehold Reform Bill was the Conservative government’s attempt to make the leasehold sector fairer, more transparent, and less expensive for those embroiled within it.
Key measures involved banning the sale of new leasehold houses, making it cheaper to extend the lease on properties, and increasing the standard lease extension from 99 years to 990 years.
It has now passed through Parliament, but many parts of the new Act are yet to be enforced by the Labour government.
Has the Leasehold Reform Bill Passed Into Law?
Technically, yes, but most provisions have not been enforced just yet.
Unfortunately, the bill passed into law ‘in the wash’, just as the Labour government took over from the conservatives. Their review of the Act unearthed various flaws which they are determined to correct, so they have chosen to stagger the implementation of the Act over the next few years, with only some parts being enforced under law.
Timetable for the Leasehold Reform Act Explained
Matthew Pennycook, the new Minister of State, conducted a review of the legislation and determined that much of it could only proceed once secondary legislation was passed, which would address various flaws within the original bill.
As a result, he published a tentative roadmap to implementing parts of the bill. It looks like this:
- January 2025: Removing the 2-year rule which prevented leaseholders from exercising their right to buy the freehold, or extend the lease on their property (now implemented).
- Spring 2025: Implementing ‘right to manage provisions’, including expanding access, reforming its costs and voting rights, which allows more leaseholders in mixed-use buildings to take over management from their freeholders with fewer costs (now implemented).
- 2026 (undetermined date): Taking consultation on the provisions to change service charges and excessive legal costs, giving the leaseholders the power to challenge these more easily, and have them vetted by a court or tribunal first.
Equally, the government will consult on the measures to protect freeholders whose homes exist on mixed-use estates. They intend to create a process for tackling unfair estate management fees through tribunals, and the power to challenge exploitative management practices through tribunal.
- Summer 2026: Taking consultation on measures to make it easier to buy the freehold or extend the lease. This will include a review of the valuation rates used to calculate the cost of ‘enfranchisement’ charged to leaseholders. The government states that they will need to pass secondary legislation to address flaws in this part of the Act.
As you may notice, the timeline is vague, and much of it subject both to legal consultation, and then the passing of secondary legislation to amend the original Act. This concoction of bureaucratic measures is likely to cause delays for leaseholders who were keen for change.
Have Any Measures From the Leasehold Reform Act Been Enforced?
Yes, but admittedly very few. Here are two measures the government has implemented from the Leasehold Reform Act so far:
- Abolished 2-year waiting period: Leaseholders can extend their lease or buy their freehold without needing to wait for 2 years after buying their property. This came into force on the 31st January 2025.
- Implemented Right To Manage provisions (RTM): They have changed provisions to allow more leaseholders the RTM, and removed the requirement for them to cover the freeholder’s legal costs when making a claim. This came into force on the 3rd March 2025.
The government also concluded a consultation on increasing the transparency of buildings insurance fees, which are charged to leaseholders, on the 24th February 2025.
What Are the Key Provisions of the Leasehold Reform Act?
Here’s a quick overview of the measures proposed by the Leasehold Reform Act, which are due to come into force over time, as secondary legislation is passed concurrently.
- Leasehold extension made easier: The Act aims to make it easier for leaseholders to both buy the freehold of their property, and extend the lease. This process commonly becomes very expensive once the property lease has less than 80 years remaining.
- Longer lease extensions: The standard lease extension term will be 990 years for houses and flats as the default tenure, up from just 50 years in houses, and 90 years for flats.
- Transparent service charges: The Act aims for to make service charges more transparent under a standard billing and calculation system, so it is easier to challenge the costs proposed by freeholders or managing agents.
- Easier block management: The Act will make it easier for leaseholders to take over management of their building from the freeholder (or their approved agent)
- Cheaper leasehold enfranchisement: It will be cheaper for leaseholders to undergo the process of enfranchisement – i.e. to extend the lease or buy the freehold – as well as doing away with ‘marriage value’ costs.
- Redress scheme access: Widening access to redress schemes for leaseholders, which allows them to reclaim costs for malpractice on the part of the freeholder or managing agent.
- Mandatory redress scheme for freeholders: Freeholders will be made to join a redress scheme, which enables them to be challenged by leaseholders in the event of malpractice.
- Easier leasehold sales: Measures in the bill aim to make buying or selling a leasehold property easier. This will be done by setting a maximum timescale (and fee) for home buying and selling information.
What Provisions Were Left Out of the Leasehold Reform Act?
There are some measures which were originally proposed which did not make it to the final version of the bill. The most significant among these was the abolition of ground rent.
The original intention was to reduce ground rents to zero, but in the end, the government settled on a £250 a year annual cap. This provides freeholders with a predictable, but limited, income going forwards while stopping leaseholders from being overcharged.
Secondly, while there is now a ban on the creation of new leasehold houses, there has been no such ban on flats. The original idea was to transition flats towards commonhold tenure, but this did not make the final cut.
Leasehold Reform Latest News
While the delays to the original bill are unfortunate, there are a couple of other significant developments which are worth noting.
First of all, the government has published a brand-new white paper on leasehold and commonhold reform. In addition, the housing minister also stated that “the government made clear it would publish an ambitious new Draft Leasehold and Commonhold Reform Bill in this Parliamentary session”.
While there is too much to discuss here, the paper includes the ambition to abolish the leasehold system entirely and switch to the lesser known, ‘commonhold’ form of home ownership which is popular across Europe.
It will likely take years to finalise and pass the bill, but it’s useful to know that these reforms are on the government’s agenda. Here is a brief overview of what the bill will propose:
- Reinvigorate commonhold tenure: This will include modernising the legal framework from 2002 to allow and encourage the freehold ownership of flats under a commonhold structure, and avoid leasehold ownership entirely.
- Plans to ban new leasehold flats: The government will consult on whether to restrict the sale of new leasehold flats entirely. This measure should improve prospects for every leasehold flat owner, just as the law now bans the sale of new leasehold houses.
- Enacting the remaining Law Commission recommendations: This includes strengthening the leaseholders’ right to extend their lease or buy the freehold (or manage their building).
- Ground rent regulation: There are plans to further regulate ground rents to make owning a property cheaper for leaseholders.
- Ban forfeiture: Property forfeiture as a means of ensuring compliance with a lease agreement will be banned.
- Strengthen freeholder rights on mixed-use developments: The government will discuss the best ways to achieve this through consultation. The idea is to lessen exorbitant estate management fees written into the title deeds of freehold homes built on estates managed by a developer.
Keep Up With the Latest Leasehold Reform News
It’s clear that leasehold reform is a priority for the Labour government, but despite this, it looks like leaseholders should adjust their expectations for any immediate changes to the law.
While the Leasehold Reform Act is enforced part by part, those with leasehold homes should check the news regularly for updates, and take advantage of the new changes as they come into force.
