Leasehold and Freehold Reform Act 2024 receives Royal Assent

Tyrone Grant

Update from Tyrone Grant, Head of Leasehold Enfranchisement

On Friday 24 May 2024, the Leasehold and Freehold Reform Act received Royal Assent as one of several Bills pushed through before Parliament went into recess ahead of the upcoming general election.

Here are some of the changes included in the Act:

  • The lease extension term has been increased to 990 years (up from 90 years for flats and 50 years for houses).
  • The removal of the 2 year ownership requirement for a leaseholder to qualify to extend the lease of the flat or lease or buy the freehold of the house.
  • The removal of marriage value from the calculation of premiums to be paid by leaseholders, which would make it cheaper to extend the lease or purchase the freehold.
  • The introduction of new valuation methods for premiums to be paid by leaseholders.
  • The removal of the requirement in many cases for leaseholders pay the landlord’s costs in relation to lease extensions and freehold acquisitions.
  • For the qualification of buildings for collective enfranchisement and right to manage, an increase in the non-residential threshold of from 25% to 50% of the building, which will allow more leaseholders to purchase the freehold of their building or acquire the right to manage their building.
  • Setting maximum timeframes for providing information and restrictions fees for this, which is designed to make the process of buying or selling a leasehold property quicker and easier.
  • Measures to make it simpler (and cheaper) for leaseholders to take on the management of their building.
  • Removing barriers for leaseholders in challenging unreasonable service charges at Tribunal.
  • Provisions for greater scrutiny and regulation of services charges.
  • The introduction of restrictions on insurance costs leaseholders must pay.
  • Extending access to redress schemes for leasehold and estate management.
  • A ban on new leases of houses (with certain exceptions) so that most new houses in England and Wales will be freehold from the outset.

The proposed cap on ground rents was not included in the Act.

The Leasehold and Freehold Reform Act 2024 is not yet in force and more details are to follow about when the provisions will be introduced. We will monitor the reforms and report on any changes that are brought in.

If you would like to discuss the Leasehold and Freehold Reform Act 2024 with us or for more information on a relevant matter, please do not hesitate to email me or call the Leasehold Enfranchisement team on 020 8858 6971.