The Leasehold & Freehold Act 2024

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

Reform is always a good factor particularly if it makes situations clearer and increases transparency for homeowners.

We all need more control over our lives. Many people own or invest in properties to let them or live in them or to have a second home. Afterall property is deemed as a safe investment.

The Leasehold and Freehold Reform Act 2024 (LAFRA 2024) was created to enhance the rights of leaseholders and freeholders in some circumstances. Let’s concentrate on the improvements for Leaseholders although 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 removing the requirement to pay marriage value

• Improve qualifying criteria to give more leaseholders an opportunity to buy the freehold and manage their own buildings

• Ground rent reduced to zero

• Simplified processes

• Transparency of charges for service charges

  
  

Whilst all improvements take time to unfold, you may ask yourself as a flat owner do I wait to extend my lease or do it now?

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

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

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.

Still waiting 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.

This list is not exhaustive.

Article by Caroline Riley (Head of Conveyancing)