The Leasehold Reform Act 2024
The Leasehold and Freehold Reform Act 2024 is one of the biggest changes to leasehold law in England and Wales for many years.
Many leaseholders have heard about proposed changes such as 990-year lease extensions, the abolition of marriage value and reduced costs when extending a lease or buying the freehold. However, there is often confusion about which reforms are already in force and which changes are still to come.
If you own a leasehold flat or maisonette, understanding the Leasehold and Freehold Reform Act 2024 could help you decide whether to extend your lease now or wait for further reforms.
What Is the Leasehold and Freehold Reform Act 2024?
The Leasehold and Freehold Reform Act 2024 was introduced to give leaseholders greater rights and make it easier and potentially cheaper to:
- Extend a lease
- Buy the freehold of a house
- Participate in collective freehold purchases
- Challenge certain charges and management arrangements
The reforms are designed to simplify leasehold ownership and reduce some of the costs that leaseholders have traditionally faced.
However, many of the most significant changes have not yet been implemented.
What Changes Have Already Come Into Force?
Removal of the Two-Year Ownership Rule - One of the most important leasehold reform changes has already been implemented. Before January 2025, most leaseholders had to own their property for at least two years before exercising their statutory right to extend a lease or buy the freehold.
That requirement has now been removed. This means buyers can begin the lease extension process immediately after purchasing a leasehold property.
For buyers considering a flat with a shorter lease, this change can provide greater flexibility and remove a significant obstacle.
What Leasehold Reforms Are Still Pending?
990-Year Lease Extensions
Under the current system, qualifying leaseholders can usually add 90 years to their lease. The Leasehold and Freehold Reform Act proposes increasing this to 990 years.
Abolition of Marriage Value
One of the most widely discussed leasehold reforms is the proposed abolition of marriage value. Marriage value currently applies when a lease falls below 80 years remaining.
It represents the increase in value created by extending the lease and leaseholders must currently pay 50% of that increase to the freeholder.
For some leaseholders, marriage value can add thousands of pounds to the cost of a lease extension.
Changes to Freeholder Costs
Currently, leaseholders extending a lease or buying the freehold are often required to pay the freeholder's reasonable legal and valuation costs.
The Act proposes changes that could reduce or restrict some of these costs.
Should You Wait for Leasehold Reform Before Extending Your Lease?
The answer depends on your circumstances. Factors to consider include:
- Your current lease length
- Whether marriage value already applies
- Your plans to sell or remortgage
- The likely cost of a lease extension today
- The uncertainty surrounding future reforms
While some leaseholders may benefit from future changes, others could face higher costs if valuation assumptions change or implementation takes longer than expected.
Obtaining advice from a specialist lease extension surveyor and solicitor can help you understand your options.
Need Advice on a Lease Extension or Freehold Purchase?
Whether you are considering a lease extension, buying the freehold or simply want to understand how the Leasehold and Freehold Reform Act 2024 may affect you, obtaining advice early can help you make informed decisions.
At Conveyancing Collective, we work with experienced lease extension solicitors and specialist valuers who can explain your options in plain English and help you understand the likely costs involved.
Get in touch if you would like an introduction to trusted leasehold professionals and a discussion about your next steps.
https://conveyancingcollective.com
020 8152 3399