The Leasehold Reform Act 20024 (“The LFRA”), received royal assent in 2024, making a significant step forward in the UK Government’s ongoing reform of the leasehold system in England and Wales.  

Most of the provisions of the Act are not yet in force, as they require detailed secondary legislation, as well as further consultation and guidance. The implementation will be a phased progress over the next few years however landlords should familiarise themselves with the changes. 

The Act introduces sweeping reforms aimed at enhancing the rights of long leaseholders and increasing transparency in the residential leasehold sector. 

Key Leasehold Reforms

Key changes under the LFRA include:

• A ban on leasehold houses: All newly build houses must be sold as freehold. 
• Simplified Lease Extension Process: Including removal of the two-year ownership requirement, allowing leaseholders to apply for a lease extension immediately after purchase and abolishment of the marriage value. The Act also increases the standard lease term to 990 years at a peppercorn rent and ground rent reduced to a peppercorn rent.  
• Transparency in Service Charges and Buildings Insurance Fees: Leaseholders will be entitled to clearer information on what they are being charged for. 
• Minimising costs payable to Landlords: The Act removes the ability for landlords to recover certain administrative and legal costs from leaseholders.
• Increased regulation of Property Management Agents:  Managing Agents will be required to have mandatory professional qualifications.

Implementation and Ongoing Consultations 

The Government has confirmed that implementation of the Act will be phased as many of the reforms require secondary legislation and consultation. These consultations are intended to inform how the provisions of the Act will work in practice. 

The Government has launched its consultation in relation to greater transparency concerning service charges, disclosure requirements for buildings insurance arrangements, and the section 20 process. Landlords and leaseholders are encouraged to take part in the consultation which can be found here - 

Strengthening leaseholder protections over charges and services: consultation - GOV.UK.