LEASEHOLD REFORM 2024 Practical implications for surveyors, agents and property owners
- Callie Tuplin
- 11 hours ago
- 9 min read
 | Callie is a Senior Solicitor in the Leasehold Enfranchisement Division at Holmes & Hills Solicitors, specialising in lease extensions, collective enfranchisement and residential landlord and tenant matters, advising leaseholders, freeholders, developers and managing agents. Callie works closely with surveyors and property professionals, providing clear, practical advice on valuation-sensitive matters and the evolving leasehold reform landscape. |
Callie explains the wide-ranging changes that recalibrate the rights and obligations of both leaseholders and freeholders. She considers that one of the proposals, the extension of lease length to 990 years, “is expected to make leasehold properties more attractive on the housing market while also reducing the financial pressures previously associated with repeated lease extensions.” |
The Leasehold and Freehold Reform Act 2024 (LAFRA and the Act) represents one of the most substantial restructurings of the leasehold property system in recent decades. Although it secured Royal Assent in May 2024, its provisions continue to be implemented in phases throughout 2025 and 2026. For conveyancers, surveyors, managing agents and property investors. Understanding the practical and commercial implications of these changes is essential as the sector adjusts to a radically transformed leasehold landscape.
Removal of two-year ownership rule
The government’s initial phase of implementation of the Leasehold and Freehold Reform Act 2024 has focused on removing some of the most immediate barriers facing leaseholders. Previously, leaseholders were required to own a property for at least two years before they could constitute a Qualifying Tenant and commence leasehold enfranchisement proceedings. This restriction has now been abolished under the LAFRA, allowing leaseholders to extend their lease immediately upon acquiring ownership and being registered as the proprietor at the Land Registry.
This reform is highly beneficial, as it enables new homeowners to secure long-term leasehold interests without delay, helping to prevent any reduced marketability of the property and avoiding potential financial penalties associated with shorter leases. By removing this waiting period, the Act enhances flexibility for leaseholders and would make leasehold properties with shorter lease terms more marketable. Immediate eligibility means that purchasers of short-lease properties can now secure the longevity of their leasehold interest without delay. This reform increases certainty and may revive interest in properties previously deemed unattractive due to lease length.
Abolition of ‘marriage value’
 |  |
The proposed abolition of ‘marriage value’ under the LAFRA marks a profound shift in the balance between leaseholders and freeholders, and one that continues to fuel controversy under property law. The aim of ‘marriage value’ was to reflect the fact that a property with a short lease is worth less than the same property with a long lease. When a leaseholder extends their lease, the property’s value increases (sometimes substantially). Leaseholders extending a lease with fewer than 80 years remaining were required to share the uplift in value equally with the freeholder, with both parties benefiting from the enhancement in value.
This change benefits those leaseholders wanting to extend leases with less than 80 years remaining as the costs associated with doing so are considerably more affordable. Furthermore, it is widely known that many mortgage lenders typically prefer a leasehold property to have at least 85 years remaining on the lease. This reform will therefore prevent properties becoming too difficult to sell or mortgage due to short lease terms and reduces the pressure on leaseholders having to proceed with a costly lease extension subject to the ‘marriage value’ provision.
While advantageous for leaseholders, the removal of this provision is unfavourable to freeholders, many of which are institutional investors.
Freehold interests have previously been valued to reflect not only ground rent income, but also the potential for future premiums arising from lease extensions. By abolishing marriage value, the Act eliminates this source of income, thus significantly decreasing the property’s worth, meaning freeholders receive markedly lower premiums when leaseholders are extending a lease which has fallen below 80 years or acquire the freehold.
A coalition of major freeholders (the “Coalition”) launched a judicial review challenging the abolition of marriage value. The main premise of their argument was regarding the valuation reforms. According to the Coalition, the government has not struck the “fair balance” required under Article 1 of Protocol 1 (known as “A1P1”) of the European Convention of Human Rights between the public interest and the protections of private property. The Coalition argued that the reforms would infringe their rights, and that they are deprived of a fair return on their assets, with the LAFRA failing to provide adequate compensation for the loss of their income.
Since launching the challenge, the Coalition secured permission to proceed to a full hearing, which took place in July 2025. However, on 24 October 2025 the High Court dismissed all claims, holding that the abolition of marriage value, the ground rent cap, and the restrictions on cost recovery were lawful and compatible with A1P1. The court concluded that Parliament had acted within its margin of appreciation in pursuing a legitimate public interest. However, this decision remains open to appeal by the Coalition, which would prolong financial resolution, with the potential that the case will reach the European Court of Human Rights. In addition, a body of secondary legislation is required to bring the provisions into force and to supply the technical detail necessary for their practical operation. It is not yet clear whether the government will move ahead with implementing the remaining provisions before any appeal is resolved, or wait to see whether the Coalition pursues further action.
90 years to 990 years
 | 
|
One of the most significant reforms is the ability for leaseholders to extend their lease by 990 years, replacing the previous limit of an extension of just 90 years for flats, and 50 years for houses, for statutory claims. This reform will be particularly beneficial for leaseholders as it can increase the value and saleability of a property, as buyers and mortgage lenders favour properties with long leases. As a result, the change is expected to make leasehold properties more attractive on the housing market whilst also reducing the financial pressures previously associated with repeated lease extensions. This reform will also provide leasehold owners with more security over the property as a 990-year extension effectively makes your ownership a “virtual freehold”. As a result, leasehold owners will no longer need to worry about the lease running down and renewing the lease again during their lifetime, or even, their great-grandchildren’s lifetimes.
Regulation of landlords in conveyancing
The Act is also set to improve the conveyancing process by introducing provisions to impose time limits on landlords when supplying information required for the sale of a leasehold property. Currently, landlords are not legally required to respond within a specific timeframe, which can lead to significant delays in property transactions. This issue becomes particularly problematic when the freeholder fails to respond promptly or intentionally delays providing the required information. By introducing statutory time limits, the Act aims to increase accountability for landlords and reduce unnecessary delays in leasehold property sales, ultimately making the conveyancing process more seamless for both buyers and sellers.
Management, service charges and estate rent charges under the LAFRA
The Act also delivers wide‑ranging reforms to improve transparency, accountability and fairness for leaseholders and freehold homeowners across England and Wales. Central areas of reform include service charge administration, estate management charges, leaseholder rights of redress, and the standards expected of those responsible for managing residential buildings and estates. These changes reflect long‑standing government commitments to strengthen consumer protections and enhance the ability of property owners to hold landlords and managing entities to account.
A new standardised framework for service charges
One of the most significant aspects of LFRA is the introduction of a highly structured and transparent framework for issuing and managing service charges. Landlords will be required to adopt standardised service charge demands at the outset of each accounting year, accompanied by an annual budget to explain how costs have been forecast. This approach is intended to provide clarity, consistency and a reliable financial picture, enabling leaseholders to scrutinise charges effectively and identify unreasonable expenditure.
Mandatory annual reporting requirements
Complementing the new service charge structure is a detailed annual report that landlords must provide to leaseholders. This report will set out essential management information, including key contact details, important lease dates, and details concerning the building’s physical condition. It must also include a schedule of mandatory administration charges, an overview of any major works planned within the following two years, together with information on whether the costs are supported by reserve funds, and an explanation of the available dispute‑resolution processes. These requirements aim to dismantle historic information imbalances and strengthen leaseholders’ ability to monitor and assess management performance.
Enhanced access to redress mechanisms
The reforms extend beyond cost protections to improve substantive avenues for redress. Leaseholders in buildings where the freeholder manages directly—rather than through an agent—will now have access to government‑approved redress schemes, a right previously unavailable in many directly managed buildings. This move brings the sector more closely into line with the regulated lettings market, ensuring that complaints about poor standards of management can be addressed through recognised, independent channels.
Proposed mandatory professional standards for managing agents
As part of its wider delivery programme for the Act, the government has consulted on introducing mandatory qualifications for managing agents. This proposed reform reflects broader concerns about variable standards of competence in the sector and accompanies plans for future reform of major works governance.
Reform of estate management and estate rent charges
The Act also delivers substantial improvements for freehold homeowners on private and mixed‑tenure estates, many of whom are required to pay estate rent charges for shared services and communal maintenance. The LFRA significantly strengthens their rights by improving transparency of estate management charges and expands their ability to challenge costs and poor management decision‑making.
Bringing “the feudal leasehold system to an end”
The government published its draft Leasehold and Commonhold Reform Bill on 27 January 2026, outlining further proposed reforms of the leasehold and commonhold system in England and Wales. For many years, UK homeowners have found themselves trapped in a costly leasehold system, with escalating ground rents and service charges.
As part of the UK Government’s plan “to bring the feudal leasehold system to an end”, Keir Starmer has stated that “we’re capping ground rents at £250”, which will be introduced under the Commonhold and Leasehold Reform Bill. Many lenders will decline mortgages where ground rent exceeds 0.1% of the property value and also refuse leases where rent doubles every 10 or 15 years, therefore making many leasehold properties difficult to sell or mortgage. This reform, if implemented, would therefore reduce financial pressures on leasehold owners and make leasehold properties with increasing ground rents more marketable and desirable to both buyers and lenders. The proposal under the Commonhold and Leasehold Reform Bill extends this cap by proposing that, after a 40-year transition period, the ground rent is to be reduced to a peppercorn which will increase the long-term value of leasehold properties.
This ground rent cap has already faced extensive criticism from freeholders. Landlords’ concerns lie heavily not only in relation to their own revenue, but the UK’s investment reputation and building safety.
Landlords who currently rely on escalating ground rents, particularly those exceeding the proposed £250 cap, stand to experience a significant reduction in income if these reforms are implemented. This will have a wider impact on institutional investors with larger portfolios. Ground rent has been a long-standing income stream within the leasehold sector, which has often been a predictable and, under some leases, a steadily increasing revenue stream.
The Leasehold and Commonhold Reform Bill will now be scrutinised by MPs on the Housing Committee before making its way through Parliament, with the government saying the cap could come into force in late 2028. However, this timeline could change, and nothing will be certain until the Bill becomes law and the provisions therein are fully implemented.
In summary
The Leasehold and Freehold Reform Act 2024 introduces one of the most significant overhauls of the leasehold system in decades, streamlining enfranchisement rights, removing historic barriers such as the two‑year ownership rule, and abolishing marriage value to make lease extensions more affordable. The Act further enhances security and marketability for homeowners by enabling 990‑year lease extensions and improves the conveyancing process through proposed time limits on landlord responses.
Alongside these changes, it modernises management obligations through standardised service charge frameworks, mandatory annual reporting, expanded redress rights, and proposed professional standards for managing agents. The draft Leasehold and Commonhold Reform Bill, including plans to cap ground rents and transition towards peppercorn rents, signals a continued shift away from the traditional leasehold model and towards greater transparency, accountability and consumer protection.
Until the full suite of reforms is implemented, leaseholders remain in a state of uncertainty—particularly those seeking lease extensions or facing burdensome ground rent obligations. The timeline for bringing these measures into force is still unclear, and there is a genuine risk that some provisions may be delayed indefinitely or fail to progress beyond the statute book, as has occurred with previous legislative reforms.
If you would like to discuss how the Leasehold and Freehold Reform Act 2024 may affect your portfolio, valuations or ongoing transactions, please contact Callie Tuplin at Holmes & Hills Solicitors or visit www.holmes-hills.co.uk.
Comments