The Current State of Leasehold Reform

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As of 31st January 2025, significant reforms under the Leasehold and Freehold Reform Act 2024 came in, bringing important changes for leaseholders and landlords across England and Wales.

The Reformed Provisions Already in Force

  • Since 24 July 2024:

    • New rules were introduced for rent charge arrears.

    • Landlords can no longer recover legal costs via the service charge unless a lease explicitly allows it.

    • Section 125 of the Building Safety Act 2022 was repealed, removing previous rules on remediation costs from insolvent landlords.

    • Stronger notification requirements were introduced in the event of landlord insolvency for higher-risk buildings.

  • Since 31 October 2024:

    • Amendments to the Building Safety Act 2022 clarified the process for remediation and contribution orders.

    • Key terms within the Act were refined to support more consistent application and enforcement.

Key Change from 31st January 2025

Abolition of the Two-Year Ownership Requirement

Section 27 of the Act removed the requirement for leaseholders to have owned their property for at least two years before they could:

  • Extend their lease under the Leasehold Reform, Housing and Urban Development Act 1993, or

  • Purchase the freehold of their house under the Leasehold Reform Act 1967.

Importantly, this change applied retrospectively — meaning all current leaseholders benefit, not just those entering into new leases.

New as of 3rd March 2025: Right to Manage Reform

On 3rd March 2025, further provisions came into effect allowing more leaseholders to take over the management of their building or purchase the freehold. The key change is the increase in the ‘non-residential’ threshold from 25% to 50%. This means leaseholders in buildings with up to half the floorspace in commercial or other non-residential use can now qualify for enfranchisement or the right to manage.

This is especially relevant for those in mixed-use developments, where commercial space previously excluded many leaseholders from these rights.

Upcoming Consultations

The government has announced further consultations to continue reforming the leasehold system:

  • Ban on Insurance Commissions:
    A consultation is expected anytime now to discuss banning insurance commissions paid to freeholders and managing agents, aiming to reduce costs for leaseholders.

  • Valuation Reform:
    In Summer 2025, the government also plans to consult on the valuation rates used to calculate the cost of lease extensions and freehold purchases, with the goal of making these processes more affordable.

  • Estate Management Charges:
    A third consultation is expected later this year to address the growing concern around estate management charges, particularly for freehold homeowners on private estates. The aim is to introduce greater transparency and stronger rights of challenge, similar to those available to leaseholders.

If you’re a leaseholder or landlord and you’re unsure how these changes could affect your property or responsibilities, get in touch with our team — we’re here to help.