Leasehold and Freehold Reform Act 2024: What It Means for You

The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024. It is the most significant overhaul of leasehold law in England and Wales for a generation, building on the Leasehold Reform (Ground Rent) Act 2022 which banned ground rent for new leases.

This guide explains the key changes, when they come into force, and what they mean for leaseholders buying, selling, or managing a flat or house.

Background: Why Was Reform Needed?

England and Wales have approximately 5 million leasehold properties. Leaseholders have long faced:

• Escalating ground rents (some doubling every 10–25 years)
• Disproportionate lease extension costs
• High service charges with limited transparency
• Difficulty purchasing the freehold

The 2022 Act banned ground rent for new residential leases. The 2024 Act goes much further.

Key Changes Under the 2024 Act

1. Mandatory 990-Year Lease Extension Terms

Leaseholders exercising their right to extend now receive a new lease of **990 years** (replacing the previous 90 years for flats and 50 years for houses).

This effectively makes leasehold residential properties perpetual and removes the risk of the lease falling to a short term that makes the property unmortgageable or unsaleable.

2. Ground Rent Set to Zero on Extension

When a leaseholder extends their lease under the Act, the ground rent is set to zero (£0 peppercorn). This applies to all new extensions, regardless of what the existing lease says.

3. Right to Extend Extended to Houses

Previously, leaseholders of houses could not extend under the right to extend legislation in the same way as flat owners. The 2024 Act corrects this, giving house leaseholders the same rights as flat leaseholders.

4. Lower Threshold for Collective Enfranchisement

The previous rule required at least 50% of leaseholders to participate in a collective freehold purchase. The 2024 Act retains the 50% participation rule but removes the requirement that no more than 25% of the building can be used for non-residential purposes, increasing the buildings eligible for collective enfranchisement.

5. Service Charge Transparency

Freeholders and managing agents must now provide leaseholders with:

• Standardised accounts showing income and expenditure
• Supporting information in a prescribed format
• Notification of planned major works earlier

This significantly strengthens leaseholders’ ability to challenge excessive or opaque service charges.

6. Right to Manage Expanded

The Right to Manage (RTM) allows leaseholders to collectively take over management of their building without buying the freehold. The 2024 Act:

• Removes the requirement that no more than 25% of the building is non-residential
• Extends RTM to mixed-use buildings
• Streamlines the RTM process

7. Restrictions on Forfeiture

The Act introduces additional procedural hurdles before a freeholder can apply to court for forfeiture (the process of terminating a lease and repossessing the property for breach of lease terms, including unpaid service charges).

What the Act Does NOT Change

The 2024 Act does not:

• Abolish leasehold tenure (commonhold reform was proposed but not included in the final Act)
• Automatically change existing leases
• Cap or freeze service charges

Timeline: When Do Changes Take Effect?

Many provisions of the Act require secondary legislation (statutory instruments) before they come into force. As of early 2026, commencement orders are being introduced in phases. Check the government’s website for the current commencement status of specific provisions.

Key dates:

• **24 May 2024** — Royal Assent
• **2025–26** — Phased commencement of specific provisions

What This Means If You Are Buying a Leasehold Property

• Check the existing ground rent provisions in the lease before exchanging contracts
• Verify the remaining lease term — anything under 85 years will be harder to mortgage and should trigger lease extension negotiations
• With 990-year extensions now the standard, the value impact of a short lease is reduced over the long term
• Service charge accounts should be more transparent under the new rules

What This Means If You Already Own a Leasehold Property

• If your lease has less than 80 years remaining, consider extending now while the Act is being implemented
• Review your service charge accounts for transparency — you have stronger rights to challenge unreasonable charges
• If you are in a block, consider whether collective enfranchisement or RTM is now more achievable