The latest on the Leasehold and Freehold Reform Act 2024
The delay in providing clarity to flat owners on whether to extend their leases or not continues.
Reforms to the Leasehold and Freehold laws are currently with the Court of Appeal, and we await the outcome of these proceedings.
What happens next could have a substantial effect on individuals and households across the country. As such, our Leasehold Property Team at Attwaters is providing an update on the progress of the changes to leasehold law so far.
The Leasehold and Freehold Reform Act 2024
The Leasehold and Freehold Reform Act 2024 aims to overhaul the leasehold system, simplifying the process of extending a lease and purchasing a freehold, and making the system fairer and less expensive.
The Act’s primary measures include:
- Lease extensions to increase to 990 years
Once implemented, the standard statutory lease extension will increase from 90 years for flats to 990 years, while ground rent will be reduced to a peppercorn rate (£0). Until this becomes law, lease extensions will continue to be limited to an additional 90 years only.
- Marriage value to be abolished
Currently, when a lease requires extension, but there is less than 80 years left to run on it, an additional fee called the ‘Marriage Value’ is added to the bill. The difficulty is that this can make the cost of extending a lease onerous for some leaseholders. Many have found themselves effectively trapped in a property that is falling in value due to the limited length of time left on the lease.
Under LAFRA, the marriage value will be abolished, but until the changes become law, paying it is still a legal requirement. At present, the leaseholder must also pay the freeholder’s legal and surveyor’s fees. However, under the new legislation, in most cases this will not be necessary.
- Government consultation on lease extension prices
The government is also seeking to bring in additional legislation concerning the calculation models used to determine lease extension prices (the premium paid to landlords). An official consultation is ongoing, which closes on 23 September 2026.
- The Commonhold and Leasehold Reform Bill
Further to LAFRA becoming law, the government has also decided to fix specific flaws in the 2024 Act by linking its final rollout to the new Commonhold and Leasehold Reform Bill. This new legislation aims to modernise the commonhold and leasehold frameworks in England and Wales.
Under the proposals, the use of leasehold will be banned for most new flats, and commonhold – where each flat owner in a multi-occupancy property owns their freehold, and a commonhold or residents’ association owns and manages the common parts of the property- will be the default tenure for new flats.
What happens next?
As the valuation mechanism relies on the passage of the broader upcoming Commonhold and Leasehold Reform Bill and finalised consultation rates, industry experts do not expect these changes to take effect until late 2027 or 2028 at the earliest. The appeal court hearing has also added additional delays.
I need to extend my lease. What should I do?
Whether you should extend your lease under the current regulations or wait until the new rules come in depends on a number of factors, including the term left on your lease, as well as whether you need to sell your property or remortgage.
Whatever your concerns, our specialist Leasehold Property Team can help you decide on the best course of action for you and your family.
Here to help
Rest assured that whatever happens next with the Leasehold and Freehold Reform Act and the upcoming Commonhold and Leasehold Reform Bill, our Leasehold Property experts will continue to follow every development.
If you would like to contact our Leasehold Property Team, call us now on 0203 871 0039 or email us at leasehold@attwaters.co.uk.
