Your Rights Under the Leasehold and Freehold Reform Act 2024

What is the Leasehold and Freehold Reform Act 2024?

The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024. It is the most significant piece of leasehold reform legislation in decades, designed to make the system fairer for the millions of leaseholders in England and Wales.

The Act covers a wide range of issues: lease extensions, enfranchisement (buying the freehold), ground rents, service charge transparency, building safety, and estate management. Not all provisions are in force yet — many will be brought into effect through secondary legislation over the coming months and years.

This guide summarises the key provisions and explains what they mean in practical terms. Bear in mind that the detailed rules may change as the government publishes regulations and guidance.

Lease extensions: cheaper and simpler

One of the most impactful changes concerns lease extensions. Under the old system, extending a lease was expensive and complicated, with marriage value (an additional payment when the lease falls below 80 years) adding thousands to the cost.

Key changes:

990-year extensions — leaseholders of flats will be able to extend their lease to 990 years (up from 90 years) with a ground rent of zero (a “peppercorn”). House leaseholders will also gain the right to a 990-year extension.
Abolition of marriage value — the Act removes the obligation to pay marriage value, which often made extensions prohibitively expensive for leases below 80 years.
No two-year ownership requirement for houses — house leaseholders will no longer need to have owned the property for two years before they can extend.
Standard valuation methodology — the government will prescribe a standard method for calculating the premium, making the process more predictable and reducing the need for expensive valuations.

Buying the freehold (collective enfranchisement)

Collective enfranchisement is the process by which leaseholders in a building come together to buy the freehold. The Act makes several changes to make this process more accessible.

Lower participation threshold — the requirement that at least half of the flats in a building must participate is expected to be reviewed downward, making it easier for leaseholders in larger buildings to qualify.
Removal of the non-residential limit — currently, buildings with more than 25% non-residential floor space cannot enfranchise. The Act raises this limit to 50%, bringing many mixed-use buildings within scope.
Cheaper premiums — the same valuation reforms (abolition of marriage value, prescribed rates) that reduce lease extension costs also apply to enfranchisement premiums.
Right to participate later — leaseholders who did not join the original enfranchisement claim may gain a right to “buy in” to the freehold company afterwards, at a fair price.

Ground rent reforms

Ground rent has been a major source of frustration, with some leases containing clauses that double the ground rent every 10 or 25 years, making properties unmortgageable.

Cap on existing ground rents — the Act includes provisions to cap ground rents on existing leases to a peppercorn (effectively zero). The government will consult on how and when this is implemented.
Ban on new ground rents confirmed — the Leasehold Reform (Ground Rent) Act 2022 already set ground rent to zero on most new leases. The 2024 Act reinforces and extends this.

Note that the timeline for capping existing ground rents to zero is not yet confirmed. Watch for secondary legislation and government announcements.

Service charge transparency

For many leaseholders, service charges are the single biggest source of grievance. The Act introduces several measures to improve transparency.

Standardised service charge accounts — landlords and managing agents will be required to issue service charge demands in a standard format, making it easier to compare and scrutinise charges.
Annual reports — landlords will need to provide annual reports detailing how service charge money has been spent.
Right to request invoices — leaseholders will have a clearer right to inspect the underlying invoices and contracts that support service charge demands.
Restriction on legal costs recovery — landlords will face limits on recovering their legal costs from leaseholders through the service charge in disputes, reducing the chilling effect of “we’ll just add our legal fees to your bill”.

Right to Manage improvements

The Right to Manage (RTM) allows leaseholders to take over the management of their building without having to buy the freehold. The Act makes several improvements.

Removal of the non-residential limit — the 25% non-residential floor space limit for RTM claims is raised to 50%, matching the enfranchisement change.
Multiple RTM companies on estates — on larger estates with multiple buildings, each building will be able to have its own RTM company rather than requiring one for the whole estate.
Costs protection — the Act limits the freeholder’s ability to recover their costs of dealing with an RTM claim from the leaseholders, making the process less financially intimidating.

Building safety and insurance

Insurance commission ban — managing agents and freeholders will no longer be able to receive commissions from insurance brokers. This has been a widespread practice that inflated insurance premiums at leaseholders’ expense.
Right to alternative insurance quotes — leaseholders will have the right to obtain and present alternative insurance quotes, giving them leverage to challenge overpriced policies.

Estate management charges

For the first time, the Act extends protections to freehold homeowners on managed estates who pay estate management charges for the upkeep of communal areas, roads, and amenities. These homeowners will gain similar rights to challenge unreasonable charges and demand transparency as leaseholders have for service charges.

What to do now

Although not all provisions are in force yet, there are practical steps you can take now:

Know your lease — read and understand the terms of your lease, particularly the clauses on ground rent, service charges, and lease length.
Form or strengthen your association — the Act gives collective rights more teeth. An organised association is in the best position to exercise them.
Keep records — start collecting service charge demands, ground rent receipts, and correspondence with your managing agent. Good records are essential if you later want to challenge charges or apply for RTM.
Stay informed — the implementation timeline is ongoing. Follow updates from the government, LEASE (the Leasehold Advisory Service), and leaseholder organisations.
Take professional advice if needed — if you are considering lease extension, enfranchisement, or RTM, consult a solicitor who specialises in leasehold law. The reforms change the economics significantly, and timing your claim could save you money.