Thousands of leaseholders across the UK are still waiting for vital leasehold reforms that could make it easier and cheaper to extend their leases or purchase their freeholds. The Leasehold and Freehold Reform Act 2024, passed before the last general election, promised major changes, but much of the legislation remains inactive, leaving leaseholders in limbo.
Key reforms proposed under the new law
The Act contains several significant changes, including the abolition of Marriage Value—a fee that makes extending leases with under 80 years remaining significantly more expensive. Under the proposed rules, leaseholders will no longer have to pay this charge, reducing the overall cost of extending leases.
Another key change involves capping ground rents used in lease extension calculations. The new law dictates that future ground rent calculations will assume a cap of 0.1% of the property’s value. For instance, if a flat worth £200,000 has a rising ground rent that would surpass £200 annually, this cap would lower lease extension costs considerably.
Additionally, freeholders will be required to cover their own legal and valuation fees in many lease extension cases. Currently, leaseholders must pay not only their own legal costs but also those of the freeholder. If enacted, this change would remove an extra financial burden from leaseholders.
Delays and legal challenges slowing progress
Despite these proposed reforms, progress has been sluggish. In January 2025, a small but significant step forward was made, with the removal of the requirement for leaseholders to wait two years before applying for a lease extension. As of 31 January 2025, leaseholders can extend their leases as soon as their ownership is registered with the Land Registry.
However, two major setbacks threaten further progress. Firstly, six groups of freeholders have secured a judicial review to challenge the legality of some of the Act’s key provisions. This review, scheduled for July, will examine whether making lease extensions cheaper violates the human rights of freeholders. If the court rules against them, appeals to the Supreme Court are likely, potentially delaying reforms further.
Secondly, the government announced in November that it would consult on lease extension valuation rates in “Next Summer,” rather than launching the consultation immediately. This delay suggests that implementation may not be a priority, leaving leaseholders uncertain about when cost reductions will take effect.
Advice for leaseholders facing uncertainty
Leaseholders with fewer than 80 years remaining on their leases or high ground rents stand to benefit most from these reforms, yet many cannot afford to wait indefinitely. Legal experts are advising those in this situation to prepare for lease extensions under current legislation while keeping an eye on the progress of reforms.
“We’re encouraging leaseholders to set a timeline—perhaps a year or two from now—for when they will start their lease extension process,” say industry professionals. “They should save and plan as though they will be using the current system. If reforms come into force and reduce costs, that’s a bonus. If delays persist, they can proceed under the existing rules rather than waiting indefinitely.”
With freeholders challenging the reforms and government action moving slowly, the timeline for full implementation remains unclear. However, letting agents and property professionals will play a key role in guiding leaseholders through this evolving legal landscape, ensuring they make informed decisions about their property investments.
