In May 2024, during the “wash up” period following the call for a General Election, the Leasehold and Freehold Reform Act 2024 was enacted. Notably, proposals by the previous Conservative government to cap ground rent and make commonhold the default tenure, as recommended by the Law Commission in 2020, were not included in the final law.

In contrast, the Labour government has committed in its 2024 King’s Speech briefing notes to act swiftly in providing homeowners with enhanced rights, powers, and protections. They have pledged to introduce a draft Leasehold and Commonhold Reform Bill that aims to dismantle the outdated leasehold system and reinvigorate commonhold ownership. Alongside this, there is a promise to address existing ground rents, ensuring that leaseholders are no longer burdened by unregulated and unaffordable costs.

The latest developments in leasehold reform are unfolding across several key areas. One of the first significant changes is the removal of the long-standing two-year rule. Previously, leaseholders were required to wait for two years after purchasing a property before extending their lease or buying the freehold. Thanks to Section 27 of the Act implemented by the Leasehold and Freehold Reform Act 2024 (Commencement No 2 and Transitional Provision) Regulations 2025 (SI 2025/57)—this barrier has been eliminated, allowing new leaseholders to immediately pursue lease extensions or freehold acquisitions.

In the coming months, the Act’s provisions on the right to manage will take effect. These reforms are designed to simplify access and reform associated costs and voting rights, enabling more leaseholders, particularly those in mixed-use buildings, to take over management responsibilities without incurring additional freeholder costs.

There is also a strong focus on consultations aimed at addressing pressing concerns. The government is preparing to engage with stakeholders about service charges and legal costs, a move intended to counteract the opaque and excessive fees that have long burdened leaseholders. This consultation will explore replacing commissions on building insurance with transparent and fair fees. Additionally, consultations are planned to review the valuation rates used for enfranchisement premiums and to explore measures that will protect residential freeholders from unfair “fleece hold” estate management charges. These initiatives are expected to empower leaseholders by ensuring they have better access to critical information, the right to challenge unreasonable costs, and the option to appoint substitute managers if necessary.

Looking further ahead, the government has announced that a draft Leasehold and Commonhold Reform Bill will be published in the second half of 2025. Prior to this, a White Paper will be released to invite public consultation and discussion on how best to transition away from leasehold ownership. The anticipated reforms include a ban on new leasehold flats subject to exemptions that protect housing supply, a cap on existing ground rents, and the removal of forfeiture provisions. The draft Bill is also expected to introduce additional measures to shield leaseholders from poor service and potential abuse by unscrupulous managing agents.

In parallel, the Labour government is revisiting the regulation of the property agent sector, taking another look at Lord Best’s 2019 report. The upcoming consultation on this front will likely focus on establishing mandatory professional qualifications for property agents, thereby raising industry standards, even though the regulation of letting agents was not specifically addressed.

Overall, the Leasehold and Freehold Reform Act 2024 is already setting significant changes in motion. With key provisions coming into force and further consultations on the horizon, these measures promise to reshape the landscape for homeowners, offering greater rights and protections for leaseholders across the country.