Leasehold and Freehold Reform Act became law

The Leasehold and Freehold Reform Act became law in May 2024, applying to England and Wales¹. More than two years on, only 10 of its 125 sections have been passed, and the government says implementation requires a programme of approximately 25 to 30 pieces of secondary legislation¹.

The first measures to take effect removed the requirement for a flat owner to have lived in the property for two years before extending the lease, from February 2025¹. From 3 March 2025, the threshold for non-residential floor space in a building qualifying for the Right to Manage rose from 25% to 50%, and leaseholders were no longer required to cover their freeholder's legal fees when making a Right to Manage claim¹.

Other headline measures remain in law but not in force. These include abolishing marriage value, the additional payment leaseholders make when extending a lease with fewer than 80 years remaining, and increasing the standard lease extension term to 990 years, up from 50 years for houses and 90 years for flats, with ground rent reduced to zero¹. The government has promised to cap ground rents at £250 a year for leaseholders in England and Wales, with ground rent falling to £0 after 40 years under the proposals; the government says this means many leaseholders will save £4,000 or more over the course of their lease¹. The cap is proposed, not law¹.

In early 2025, freeholders including the Duke of Westminster and the Earl of Cadogan sought a judicial review of parts of the Act, including the abolition of marriage value and restrictions on recovering legal costs. The High Court dismissed the challenge in October 2025, but the decision is being appealed, with a Court of Appeal hearing due in April 2027¹.

The government published a draft Leasehold and Commonhold Reform Bill on 27 January 2026, proposing to ban most new leasehold flats, make commonhold the default tenure for new flats and cap existing ground rents at £250 a year in England and Wales¹. The earliest the draft Bill will become law is 2027, and it is likely to be implemented over a period of time². In July 2026 the government announced new leaseholder protections, including clearer service charge information, annual building reports and stronger rights in disputes, with most changes expected from 2027¹.

Why it matters for households

Leaseholders in England and Wales are affected, and the timing of each change differs. The two-year ownership rule and the Right to Manage threshold change are already in force¹. The measures that would alter the cost of extending a lease or buying a freehold, including the removal of marriage value and the 990-year term, have not taken effect¹.

Lease length is the point where the money is largest. Research from the Leasehold Advisory Service and the Open Data Institute found that 8% of residential leases have between 80 and 90 years remaining². For one property searched, a tool estimated extending the lease would cost between £4,000 and £6,000 with more than 80 years remaining, compared with almost £50,000 once it dropped below 80 years². Under current rules, costs rise significantly below 80 years because marriage value applies². The government is consulting on other charges used to calculate extension costs, and further legislation will be needed to set out how the new calculations work².

The Act applies to England and Wales; in Scotland very few homes are sold with this type of ownership, and housing is devolved so leasehold legislation differs in Northern Ireland². For background on tenure, see freehold vs leasehold and buying a leasehold property.

What happens next

A consultation on leasehold enfranchisement valuation rates was due to close on 23 September 2026 but has been extended to 21 October 2026¹. A separate consultation launched on 2 July 2026 asks whether "quid pro quo" leases, where a higher ground rent is agreed in return for a lower purchase price, should be treated differently or exempt from the proposed ground rent cap¹. The Court of Appeal hearing on the freeholders' challenge is due in April 2027¹. Prime Minister Andy Burnham has committed to bringing forward a Commonhold and Leasehold Reform Bill in this parliamentary session¹.