The Leasehold and Freehold Reform Act 2024 Explained

The Leasehold and Freehold Reform Act 2024 is one of the most significant shake-ups to leasehold law in a generation. It promises to make life easier and cheaper for millions of leaseholders, but much of the detail is being introduced in stages, so it pays to understand what is confirmed and what is still to come.

In this insight, we explain what the Act sets out to do, the headline changes, and why you should always confirm the current position before relying on any single point.

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Key Takeaways

• The Leasehold and Freehold Reform Act 2024 aims to give leaseholders more power, longer lease extensions, and lower costs when extending or buying their freehold.
• Standard lease extensions are set to rise to 990 years, and the rule requiring two years of ownership before you can extend is being removed.
• The valuation used to calculate extension costs is changing, including the treatment of "marriage value", which could reduce what many leaseholders pay.
• Many measures are being phased in through secondary legislation, so timings and precise details can change. Always check the current rules before acting.

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What Is the Leasehold and Freehold Reform Act 2024?

The Act is a law designed to strengthen the rights of people who own a leasehold property. Its broad aim is to make it cheaper and simpler to extend a lease, buy a freehold, and challenge unfair charges.

Leasehold ownership means you own the property but not the land it sits on, and you hold it for a fixed number of years under a lease. Over time, that has left many owners facing rising costs and complex, expensive processes to extend or gain more control. The Act is the Government's attempt to rebalance that relationship.

Importantly, the Act received Royal Assent, but that does not mean every part is in force. A large amount of the detail depends on further regulations, so the reforms are arriving gradually rather than all at once.

Longer Lease Extensions of 990 Years

One of the headline changes is a big increase in the standard lease extension length. Rather than the previous norms, leaseholders of both flats and houses are set to be able to extend by up to 990 years.

A very long lease brings you close to the security of freehold ownership, and it removes the worry of a lease running down to the point where it becomes hard to mortgage or sell. If you are weighing up your own situation, our guide on whether a 125-year lease is long enough helps put lease length in context.

Removing the Two-Year Ownership Rule

Previously, you generally had to have owned a leasehold property for at least two years before you could extend the lease or buy the freehold. The Act removes this requirement.

In practice, that means new owners should be able to start the process straight away rather than waiting. This is particularly helpful when buying a property with a short lease, where acting sooner rather than later can matter a great deal.

Ground Rent and Marriage Value Changes

The Act also targets the costs baked into leasehold ownership.

• Ground rent has long been a source of frustration, especially where it escalates over time. Reform in this area is designed to curb the burden of ground rent on leaseholders, building on the earlier move towards a token or peppercorn ground rent on many newer leases.
• Marriage value is a sum that could previously be added to the cost of extending a lease once it fell below 80 years, often making extensions much more expensive. The Act changes how extension premiums are calculated, with the aim of reducing this cost for affected leaseholders.

The precise valuation method is being set out through further regulations, so the exact figures and mechanics can still shift. Treat any specific numbers with caution and confirm them before budgeting.

Looking For Mortgage Advice?

If you're buying, extending a lease, or remortgaging a leasehold property, getting the right advice matters.

We can help you find a mortgage specialist to offer you the very best advice. Complete our Sunny Fact Find form to provide us a bit more detail about your circumstances and we'll find the best-suited adviser for your needs.

Your appointed adviser will contact you to discuss how they can help, you decide how to proceed.

Greater Control Over Service Charges

Alongside lease and ground rent changes, the Act aims to make leaseholders' costs more transparent. That includes stronger rights to understand and challenge service charges, so you can see how your money is being spent and question anything that looks unreasonable.

Transparency is a recurring theme across the reforms, the idea being that leaseholders should be able to hold freeholders and managing agents to account more easily.

A Direction Towards Commonhold

Looking further ahead, the Government has signalled a longer-term ambition to move away from leasehold as the default for flats and towards commonhold, a form of ownership where residents collectively own and manage the building without a landlord.

This is a direction of travel rather than an overnight switch, and it will require further legislation to become mainstream. For now, it is best understood as the destination the reforms are steering towards, not a change you can rely on today.

Frequently Asked Questions

Is the Leasehold and Freehold Reform Act 2024 fully in force?

No. The Act became law, but many of its provisions rely on further regulations and are being introduced in phases. Some measures may not take effect until later, so always check the current position before relying on a specific rule.

Will my lease extension automatically become 990 years?

Not automatically. The Act sets 990 years as the new standard extension term, but you still need to go through the extension process. The exact costs and steps depend on rules that are being finalised over time.

Does the Act abolish leasehold completely?

No. It reforms leasehold and points towards commonhold as a long-term alternative, but it does not abolish leasehold overnight. Millions of existing leases remain in place and are governed by the improved rules as they come into effect.

Should I wait for the reforms before extending my lease?

That depends on your circumstances, particularly how long is left on your lease. Because timings are uncertain and a short lease can create real problems, it is worth taking professional advice rather than assuming waiting is best.

Final Thoughts

The Leasehold and Freehold Reform Act 2024 could meaningfully improve life for leaseholders, with longer extensions, the removal of the two-year rule, and fairer costs among its headline promises. The catch is timing: much of the detail is arriving gradually, and the finer points are still being settled.

Because of that, treat the specifics cautiously and confirm the current rules before making any decisions. If you are comparing ownership types, our guides on the disadvantages of buying leasehold property and buying freehold are useful companion reads.