What you’ll learn in this article:
- The key reforms already in force, and what they mean for leaseholders
- What’s still to come and when we can expect changes to be implemented
- The impact of the new rules on costs, lease terms, and property management
- Practical guidance for leaseholders deciding whether to act now or wait
In May 2024, the Leasehold and Freehold Reform Act became law. Marking one of the biggest shake-ups in property law for decades. Its aim? To simplify the leasehold system, cut unfair costs, and give leaseholders more control and certainty.
While the Act sets out a bold direction of travel, many of its provisions still rely on secondary legislation and detailed guidance before they can be rolled out. So, while some reforms are already in place, others are still in the pipeline.
Here’s a breakdown of what’s changed so far, what’s still to come, and what you need to consider as a leaseholder, freeholder, or co-freeholder.
Changes Already in Effect
No More Two-Year Ownership Requirement
Since 31 January 2025, leaseholders no longer need to have owned their property for two years before applying to extend their lease or buy the freehold.
This is especially helpful for first-time buyers or those who need to act quickly in a changing market, and removes a key barrier for leaseholders looking to secure their long-term position.
Reforms Awaiting Implementation
Abolishing Marriage Value
One of the biggest changes is the removal of marriage value: A cost currently added when a lease has less than 80 years left. At the moment, leaseholders must pay this to the freeholder when extending or buying the freehold.
Once the relevant section of the Act comes into force, marriage value will be scrapped, meaning potentially thousands of pounds in savings for leaseholders with shorter leases.
What to consider now: If your lease is under 80 years, it’s worth getting advice. Delaying could mean paying more in the short term – but savings could follow once this part of the law is enacted.
990-Year Lease Extensions
The Act introduces a new standard lease extension of 990 years, replacing the current 90 years (for flats) and 50 years (for houses).
This change offers near-permanent ownership and removes the need for repeat lease extensions, a welcome move for those looking for long-term security.
Fairer Cost-Sharing
Under the new rules, leaseholders will no longer have to cover the freeholder’s legal and valuation costs when extending a lease or buying the freehold.
Instead, both parties will pay their own costs – which is likely to reduce the financial burden for leaseholders significantly.
Mixed-Use Property Reforms
Currently, if more than 25% of a building is used for non-residential purposes (such as shops or offices), leaseholders are not eligible to buy the freehold.
This cap will be raised to 50%, opening up the right to enfranchisement for many more leaseholders in urban or mixed-use buildings, particularly in areas like South London.
A Ban on New Leasehold Houses
The sale of new leasehold houses will be banned (except in very limited circumstances), helping future buyers avoid the pitfalls of escalating ground rents and restrictive covenants.
This reform won’t affect existing leasehold houses, but it marks a clear shift in the government’s approach to fairness in homeownership.
What About Co-Freeholders?
If you already own a share of your building’s freehold (commonly the case in converted houses), the reforms aren’t aimed directly at you – but you might still be affected.
For example:
- Lease extension terms will change, so co-freeholders will need to agree on how to apply the new 990-year standard.
- In mixed-use buildings, clearer rules on management responsibilities may come into play.
It’s a good time to review your building’s management arrangements and speak with co-freeholders about how to approach future lease extensions or maintenance responsibilities.
Should You Wait or Act Now?
If your lease is approaching 80 years, you might be wondering whether to wait for the new rules or act now.
Here’s the reality:
- The abolition of marriage value could save you money, but there’s no firm date yet for when this will happen.
- In the meantime, your lease continues to shorten, which can make your property harder to sell or remortgage.
If you’re planning to sell or refinance soon, it may make sense to extend now under the current rules. If you’re holding the property long-term and the lease still has a bit of time left, waiting could work in your favour.
As always, it’s best to get tailored legal advice based on your specific lease and plans.
Looking Ahead
The Leasehold and Freehold Reform Act 2024 lays the groundwork for a fairer, more transparent property system, especially for flat owners and leaseholders in mixed-use buildings.
But with much of the detail still being finalised, we recommend:
- Staying up to date on implementation timelines
- Reviewing your lease term and ownership structure
- Seeking professional advice before making big decisions
Whether you’re a leaseholder weighing up an extension, a co-freeholder managing a converted house, or a landlord in a mixed-use building – these reforms are likely to affect you in one way or another over the coming months and years.
At Grace Miller & Co, we’re always here to help you navigate the changes with confidence. Get in touch today for some free, no obligation advice.
