The House of Commons Library has released an interim report on the Leasehold and Freehold Reform Act 2024.

It can be seen here and says

The LFRA 2024, which applies to England and Wales, received Royal Assent on 24 May 2024. It significantly reshapes the leasehold system and introduces stronger rights for leaseholders. While most provisions are not yet in force, landlords and managing agents must begin preparing for the changes.

Key Changes Affecting Freeholders

Lease Extensions & Freehold Purchases

• Marriage value abolished: Landlords can no longer charge marriage value in statutory lease extensions or enfranchisement claims, reducing potential compensation.

• New standard lease term: Increased to 990 years for lease extensions.

• Ground rent reduced to a peppercorn (effectively £0) upon lease extension.

• No two-year ownership requirement: Leaseholders can now apply to extend or buy freehold immediately after purchase.

📉 Impact: Likely reduction in lease extension premiums. Freeholders may see significant loss of income from marriage value and ground rents.

Wider Access to Rights

• More leaseholders qualify for:

  • Lease extensions

  • Freehold acquisition (collective enfranchisement)

  • Right to Manage (RTM)

• Legal costs: Leaseholders can now apply for recovery of legal costs in disputes, and do not have to pay the freeholder’s costs when pursuing RTM.

⚖️ Impact: Landlords will likely face more challenges to management control, with fewer legal cost protections.

New Leasehold House Ban

• New leasehold houses are banned, with limited exceptions (e.g. National Trust, Crown land).

Charges & Transparency

• Greater transparency required for:

  • Service charges

  • Buildings insurance commissions

  • Administration charges

• Leaseholders gain new rights to request information about building management.

• Property sales packs must be provided more promptly.

🔍 Impact: Freeholders and managing agents must prepare for increased scrutiny and ensure compliance with information and transparency rules.

Enforcement & Redress

• Leaseholders gain:

  • Access to redress schemes when freeholders manage directly.

  • More favourable dispute resolution options.

Implementation Timeline & Next Steps

• Not all provisions are active yet. Many require secondary legislation.

• Already in force:

  • Leaseholders no longer need to wait 2 years to extend/buy (from 31 Jan 2025).

  • Reformed RTM process (from 3 March 2025).

• Consultations due in 2025:

  • Lease extension valuation rates (incl. replacement for marriage value).

  • Ground rent regulation for existing leaseholders.

  • Reforms to commonhold and managing agents.

🧮 Landlord preparation tip: Begin reviewing lease portfolios to assess exposure to lease extensions, lost ground rents, and future enfranchisement.

What’s Next? Draft Leasehold and Commonhold Reform Bill

Expected in late 2025, this bill will:

• Modernise and promote commonhold as a default tenure.

• Potentially restrict new leasehold flats.

• Regulate managing agents more tightly.

• Ban forfeiture as a lease enforcement mechanism.

Wales: Separate Implementation

• The LFRA 2024 applies to Wales, but the Welsh Government will introduce its own secondary legislation.

• Wales is committed to fully implementing Law Commission leasehold reform recommendations.

Summary for Landlords