The Leasehold & Freehold Act 2004

What is it, and what does it seek to improve?

Undertaking reform is generally positive, particularly where it brings greater clarity and increases transparency for homeowners. Greater transparency gives people more confidence and control over important decisions in their lives.

Property matters are relevant to almost the entirety of the population, particularly investors who may own or invest in properties to let, or to own as a second home. Property has long been deemed a safe and reliable investment.

The Leasehold and Freehold Reform Act 2024 (LAFRA 2024) was created to enhance the rights of leaseholders and freeholders in particular circumstances. In this short post, we shall concentrate on the improvements for Leaseholders - though note that much of the Act is still not in force as secondary legislation is required for the finite details.

Key points in the Act to consider and what the Act aims to improve:-

• The standard lease extension term will become 990 years and there has been a removal of the requirement to pay marriage value.

• The qualifying criteria has been improved to give more leaseholders an opportunity to buy the freehold and manage their own buildings

• Ground rent has been reduced to zero.

• The Act provides for simplified processes.

• The Act provides for transparency service charge fees.

Whilst these improvements take time to unfold, you may ask yourself as a flat owner whether you should wait to extend your lease or do it now.

If your unexpired lease term is down to 80 years or less then ‘marriage value’ becomes payable. This is where the Landlord becomes entitled to 50% of the uplift in value of the property attributable to the lease extension.

So, if you have an unexpired term of 82 years and wish to sell in the next year then consider acting now.

It is important to note that some Lenders are not so keen on lending when there is 80 years or less, which can then affect saleability.

In force already -

Section 27 came into force on 31 January 2025 (by The Leasehold and Freehold Reform Act 2024 (Commencement No. 2 and Transitional Provision) Regulations 2025).

This is the reform that eliminates the 2-year ownership requirement so that (subject to qualifying criteria) leaseholders can legally initiate:

•  statutory lease extensions, and/or

• Statutory enfranchisement (if applicable), without having owned the lease for two years.

Not yet in force as of today 29/1/2026–

• Eradication of marriage value in statutory premium calculations.

• The 990-year statutory lease extension term for flats.

• The new ground rent “buy-out” right (peppercorn without term extension) and many of the service charge / sales information pack reforms.

 [Please note this list above is not exhaustive]

If you would like specific advice on the above or would like to know your personal options, please do not hesitate to contact us today on 01502 532700 or click the 'CONTACT US' button on our homepage.

Article by Caroline Riley (Head of Conveyancing)