The UK has enacted significant leasehold reforms through the Leasehold and Freehold Reform Act 2024, which received Royal Assent on May 24, 2024. This legislation introduces a series of changes aimed at improving the rights and protections of leaseholders in England and Wales.

Key provisions of the Act include:

  • Extended Lease Terms: Leaseholders can now extend their leases up to 990 years, with ground rent reduced to a nominal amount (peppercorn).
  • Ban on New Leasehold Houses: The sale of new leasehold houses will be prohibited, making freehold the default for new houses.
  • Enhanced Consumer Rights: Leaseholders will have greater transparency over service charges and the ability to challenge unreasonable fees more easily. This includes setting maximum times and fees for the provision of necessary information during property sales.
  • Increased Right to Manage: The threshold for leaseholders in mixed-use buildings to take over management or buy the freehold has been raised from 25% to 50% of the building’s floor space.
  • Redress and Legal Costs: Leaseholders will have access to redress schemes for poor management practices and will no longer automatically bear the freeholder’s legal costs when disputes arise.

These reforms are part of the government’s broader plan to ensure fairness and transparency in the housing market, addressing long-standing issues in the leasehold system.

Leasehold reforms give more rights and protections to homeowners – GOV.UK. To discuss how this matter could impact you get in touch with our team today.

Author: Sylvia Garcia – Head of Commercial and Residential Property Department