The Leasehold and Freehold Reform Act 2024 represents the most significant change to the leasehold system in decades. The new law is designed to make home ownership fairer, simpler, and more secure for leaseholders across England and Wales.
While some of its provisions are already in force, others may be delayed or challenged in the courts, so it’s important for leaseholders to stay informed about how the reforms affect them.
🔑 Key changes introduced in 2024
- Scrapping the 2-year ownership rule
- Previously, leaseholders had to wait two years after purchasing before they could formally extend their lease or buy the freehold.
- The 2024 Act removes this barrier, allowing leaseholders to act immediately after purchase. This is especially beneficial for buyers acquiring short leases.
- Ban on new leasehold houses
- The sale of new leasehold houses is now banned (except in very limited circumstances such as National Trust or Crown land).
- This reflects a government commitment to ensure that most new houses are sold on a freehold basis, ending a practice that was widely criticised as unfair.
- Longer lease extensions
- Leaseholders of flats and houses can now extend their lease by up to 990 years (an increase from the previous 90 years for flats and 50 years for houses although this has not been implemented yet).
- Ground rent is reduced to a peppercorn (nil), making property ownership far more secure.
- Simplification of the process
- The Act aims to streamline notices, valuations, and the overall claims process, reducing scope for unnecessary disputes.
- More transparency has been introduced around costs and procedures.
⚖️ Uncertainties and legal challenges
Despite its ambitions, parts of the 2024 reforms are facing legal challenges from freeholders and institutional landlords. These groups argue that certain provisions unfairly reduce the value of their assets.
- Challenges have already been filed against elements such as the new valuation rules and the impact of longer lease terms.
- If successful, these challenges could delay implementation or force the government to amend parts of the legislation.
As of now, not all reforms are guaranteed to come into force immediately, and there remains uncertainty about the timeline.
🏠 What about commonhold?
The Act has renewed interest in commonhold ownership as a long-term alternative to leasehold. The government has signalled support for expanding commonhold in the future, but:
- No immediate switch has been legislated.
- Commonhold reforms remain at an early stage, and take-up in the UK has historically been very low.
- For most leaseholders, statutory lease extensions and collective enfranchisement remain the most practical solutions available today.
✅ What this means for leaseholders
- The reforms make it easier and fairer for leaseholders to extend their lease or buy their freehold.
- Buyers of leasehold property no longer face the disadvantage of waiting two years before exercising their rights.
- The ban on new leasehold houses protects future homeowners.
- However, the ongoing legal challenges mean that some provisions may be delayed, modified, or not implemented at all.
At extension.lease, our team stays up to date with every stage of reform and can advise you on what the changes mean in practice — whether you’re extending your lease now or planning for the future.
