Leasehold and Freehold Reform

The government has published explanatory notes to LAFRA 2024 which provides a helpful overview and explanation of what the legislation means in practice. By way of summary, LAFRA introduces:

• A ban on the sale of new leasehold houses (other than in exceptional circumstances).
• The abolishment of marriage value simplifying leasehold enfranchisement valuations and reducing costs for leaseholders in houses and flats to extend their lease or buy their freehold.
• An increase in the standard lease extension term from 90 to 990 years for both houses and flats, with ground rent reduced to a peppercorn upon payment of a premium.
• The removal of  the two-year qualifying period for leasehold enfranchisement and lease extension claims under the Leasehold Reform Act 1967 and Leasehold Reform Housing and Urban Development Act 1993 giving more leaseholders the right to extend their lease, buy their freehold and take over management of their building.
• The lifting of restrictions on repeated collective enfranchisement claims making it easier for leaseholders to purchase their freehold.
• An increase in the non-residential threshold for mixed-use buildings qualifying for enfranchisement or Right to Manage from 25% to 50%.
• Measures to improve the transparency of:

• • service charges and giving leaseholders a new right to request key financial information and non-financial information on a regular basis about service charges and the management of their building so that leaseholders can scrutinise and better challenge costs if they are considered unreasonable; and

• • administration charges and buildings insurance commissions.

• The removal of the presumption that leaseholders pay their landlord’s legal costs when challenging poor practice and giving them a new right to apply to claim their legal costs from their landlord.
• Extended access to redress schemes for leaseholders where the freeholder manages the property directly.
• Measures to ensure that  relevant property sales information is provided to leaseholders in a timely manner.
• Extended access to redress schemes where the freeholder manages the property directly and requiring freeholders who manage their property to belong to a redress scheme so leaseholders can challenge them if needed.

Part 8 of LAFRA also extends the measures in the BSA to further protect leaseholders and ensure that the BSA operates as intended. For further details please visit The Building Safety Act.

• 3 March 2025: Implementation of the Right to Manage (RTM) provisions including changing the qualifying criteria to give more leaseholders the RTM and removing the requirements for leaseholders to cover the freeholder’s legal fees when making a RTM claim. Read Erin Stephenson’s article Leasehold reform update.
• 31 January 2025: The abolition of the two-year ownership rule before making a statutory lease extension claim. Read Anna Favre’s  article Leasehold reform newsflash: The abolition of the two-year rule.
• 24 July 2024: Implementation of certain provisions relating to rent charges, service charge disputes, and the Building Safety Act 2022 (introducing the new concepts of “relevant steps” and “relevant measure” impacting upon applications for Remediation Orders and Remediation Contribution Orders) took effect. Read Laura Southgate’s and Simon Jones’ article What changes will the Leasehold and Freehold Reform Act 2024 introduce to residential service charges?

Given the evolving legal landscape, leaseholders and landlords should be prepared for further changes throughout 2025 and beyond.

The timeline for the full implementation of key provisions, particularly those affecting valuation, remains uncertain. With ongoing regulatory updates, both leaseholders and landlords should stay informed and seek professional advice where needed.

The Government published the Commonhold White Paper: The proposed new commonhold model for homeownership in England and Wales – GOV.UK on 3 March 2025 and on 27 January 2026 the highly anticipated Commonhold and Leasehold Reform Bill was published. The Bill introduces a legislative cap on ground rents of £250 a year, changing to a peppercorn after 40 years. This will apply to most long residential leases not already covered by existing legislation (ground rent has already been abolished for new leases granted after 30 June 2022 under the Leasehold Reform (Ground Rent) Act 2022) and delivers on the Government’s manifesto commitment to “tackle unregulated and unaffordable ground rent charges” and “finally bring the feudal leasehold system to an end”. New leasehold flats will be banned, home ownership strengthened by the abolishment of forfeiture and the introduction of a new enforcement regime to rebalance the relationship between landlord and tenant and a new process introduced to make it easier for existing leaseholders to convert to commonhold under a revamped commonhold model. These reforms build on action currently being undertaken by the Government to implement the Leasehold and Freehold Reform Act 2024, including increased transparency over service charges so that leaseholders can better hold their landlords to account.

The Government is currently consulting on its plans to introduce a ban on new leasehold flats and is seeking industry views on the scope of the ban, cases for exemption from the ban, how the ban on new leasehold flats should operate, timing for commencement of the ban, any transitional arrangements that may be needed and finally the costs and benefits in moving to commonhold and complying with the ban. The consultation closes on 24 April 2026.

For our further thoughts on these latest developments please see Beyond the Bill: The journey to Commonhold starts here.