Leasehold reform refers to legal changes improving leaseholders’ rights. Key goals include reducing costs, simplifying procedures, promoting commonhold, and ending unfair practices like escalating ground rents. Recent Acts in 2022 and 2024 mark major progress.
Leasehold reform has become one of the most talked-about areas of property law in England and Wales in recent years. With millions of homeowners affected by outdated and often unfair lease terms, the government has been under increasing pressure to overhaul the system.
In this guide, we break down what leasehold reform means, what changes have already been implemented, what further reforms are expected, and how you as a leaseholder can benefit — now and in the future.
What Is Leasehold Reform?
Leasehold reform refers to changes in the laws and regulations governing leasehold property ownership. The aim is to:
- Reduce unfair costs (like escalating ground rent)
- Simplify lease extension and freehold purchase rights
- Improve transparency and redress for leaseholders
- Encourage a shift towards fairer ownership models (like commonhold)
Why Is Reform Needed?
The leasehold system has come under fire due to:
- Excessive ground rents that double every 10–15 years
- Restrictive covenants requiring permissions for basic changes
- Costly and opaque service charges
- Poor management practices by landlords and managing agents
Leaseholders often feel trapped in properties they can’t easily sell, extend, or afford to maintain.
Key Reforms Introduced So Far
1. Ground Rent Reform (2022)
- New residential leases granted after 30 June 2022 must have zero ground rent (peppercorn)
- Applies to most new flats and houses
2. Abolition of the Two-Year Ownership Rule (2025)
- From 31 January 2025, leaseholders no longer need to have owned their flat for two years to start a lease extension or collective enfranchisement
3. Leasehold and Freehold Reform Act 2024 (Passed but not yet fully implemented)
- Aims to simplify lease extension and freehold purchase calculations
- Proposes to make marriage value obsolete (still in effect at the time of writing)
- Seeks to encourage conversion to commonhold in future developments
What Further Reforms Are Expected?
While some changes have been confirmed, others are still being debated or scheduled for implementation. These include:
- Capping or abolishing marriage value
- Standardising lease extensions to 990 years
- Greater control for leaseholders over building management
- Improved redress schemes for complaints and disputes
Commonhold: A Possible Future Alternative
The government is also promoting commonhold — a system where flat owners:
- Own their property outright (freehold)
- Share ownership and maintenance of communal areas
Despite being introduced in 2002, commonhold remains rare. Reforms may make it more attractive in future, especially for new developments.
Should I Wait for Reform Before Extending?
In most cases, no. While some reforms may eventually reduce lease extension costs:
- Marriage value still applies for leases under 80 years
- Premiums increase as the lease shortens
- Reforms may not be retrospective — you could miss out if you wait too long
Acting now protects your property’s value and mortgageability.
What Does This Mean for You as a Leaseholder?
Whether you own a flat or leasehold house, leasehold reform means:
- Fewer barriers to lease extension or buying your freehold
- More transparency in service charges and management
- More power to challenge unfair terms
These changes are designed to put leaseholders on fairer footing with landlords.
FAQs
Will marriage value be abolished?
Possibly — but it remains in force as of now. Government has signalled plans to remove it but remains subject to court challenge.
Should I wait to buy my freehold?
No. Freehold purchase premiums may continue rising. Reforms are not guaranteed to reduce your cost.
Can I now extend my lease without owning for 2 years?
Yes — since January 2025, the 2-year rule has been abolished.
Will commonhold replace leasehold?
Not yet. It may become more common over time, especially in new builds.
Stay Ahead of Leasehold Reform With Us
At Extension.Lease, we:
- Monitor reform developments closely
- Help clients navigate current law and future changes
- Provide lease extension and freehold purchase advice
For practical advice on how the latest reforms affect your rights as a leaseholder, speak to us and we’ll give you clear, up-to-date guidance.
