Building Safety Act 2022 leaseholder protections come into force

New financial protections for leaseholders in buildings of at least 11 metres or five storeys in height with historical safety defects came into force on 28 June 2022, under the leaseholder protections in the Building Safety Act 2022¹.

The measures form part of a wider package of leasehold reform in England and Wales. The residential leasehold sector represents one in five properties in the English housing stock, or 4.98 million homes, and one in six in Wales, or approximately 235,000 properties¹. The Building Safety Act protections sit alongside the Leasehold Reform (Ground Rent) Act 2022, which from 30 June 2022 prohibited the charging of a financial ground rent for most new regulated leases¹.

The Leasehold and Freehold Reform Act 2024, which received Royal Assent on 24 May 2024, extends the measures in the Building Safety Act 2022 to ensure it operates as intended¹. Its stated aims include making it cheaper and easier for existing leaseholders in houses and flats to extend their lease or buy their freehold, and improving consumer rights for leaseholders and homeowners on managed estates¹.

Among the changes set out in the 2024 Act are an increase in the standard lease extension term from 90 years to 990 years for both houses and flats, with ground rent reduced to a peppercorn, and the removal of the requirement for a new leaseholder to have owned their house for two years before extending their lease or buying their freehold, and for flats before extending their lease¹. The Act also raises the non-residential limit from 25 per cent to 50 per cent, allowing leaseholders in buildings with up to 50 per cent non-residential floorspace to buy their freehold or take over its management¹.

On costs, the Act removes the requirement for marriage value to be paid and caps the treatment of ground rents in the valuation calculation at 0.1 per cent of the freehold value¹. Leaseholders extending their lease, buying their freehold or exercising their right to manage will no longer generally pay the landlord's costs of dealing with the claim, such as valuation, conveyancing and legal fees, with each party generally bearing their own costs¹. The measures also prohibit commissions from the placer or manager of insurance from being recovered from leaseholders through their service charge¹.

Why it matters for households

The protections apply to leaseholders in buildings of at least 11 metres or five storeys with historical safety defects, a group defined by the height and condition of their building rather than by income or location¹. For those households, the provisions took effect on 28 June 2022¹.

The 2024 Act changes affect leaseholders more broadly. The standard lease extension term rises from 90 years to 990 years for houses and flats, with ground rent reduced to a peppercorn¹. New leaseholders no longer need two years of ownership before extending a lease or buying a freehold, and flat owners no longer need two years before extending¹. The non-residential floorspace limit rises from 25 per cent to 50 per cent, which brings more mixed-use buildings within reach of freehold purchase or management takeover¹.

On service charges, the Act requires greater transparency, including a standardised service charge demand form and an annual report, so leaseholders can scrutinise and challenge costs they consider unreasonable¹. It also requires freeholders who manage their property to belong to a redress scheme¹. The Act removes the requirement for marriage value to be paid and caps ground rents in the valuation calculation at 0.1 per cent of the freehold value¹.

What happens next

The Explanatory Notes state that the Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024¹. The notes set out the Act's commencement provisions but do not give commencement dates for the individual measures described above; those dates have not been reported here¹.