Leasehold and Freehold Reform Act 2024: What Changed

LFRA 2024 has four main strands: (1) lease extension and enfranchisement reform; (2) service charge transparency; (3) ban on new leasehold houses; and (4) ground-rent and forfeiture changes. Not all of these are in force on Royal Assent.

The Act splits into provisions that take effect automatically and provisions that need commencement orders. As of mid-2026, the position is:

• In force: the right for landlords and managers of mixed-use buildings to apply for a Right to Manage where they were previously excluded; reforms to the Building Safety Act 2022; the ban on new leasehold houses (subject to limited exemptions).
• Awaiting commencement: the 990-year extension term, abolition of marriage value, removal of the 2-year qualifying period, standardised service-charge format, new tribunal challenge rights.
• Awaiting consultation on rate-setting: the Secretary of State must set the deferment rate (used to calculate the reversion) and the capitalisation rate (used to discount future ground rent). Until those rates are set, the abolition of marriage value cannot operate.

The previous government indicated commencement would follow during 2025. The current government has confirmed broad continuity with the policy direction but reserved the right to revisit specific provisions. Leaseholders and freeholders should check the Department for Levelling Up, Housing and Communities (or its successor department) commencement table before acting on any of the reforms.

Three reforms transform the economics of lease extension and collective enfranchisement once commenced:

• 990-year extension at peppercorn ground rent. The current statutory extension under the Leasehold Reform Housing and Urban Development Act 1993 adds 90 years to a flat lease (or 50 years to a house). LFRA 2024 replaces this with a single 990-year extension at zero ground rent — effectively converting leasehold flats into something close to freehold ownership.
• No more 2-year qualifying period. Currently a leaseholder must have owned the lease for at least 2 years before claiming an extension or joining an enfranchisement. The Act removes this — making it possible for buyers to claim immediately on completion, and for short-lease properties to become more saleable.
• Marriage value abolished. Marriage value is the uplift the freeholder takes when a lease drops below 80 years — currently 50% of the increase in value once the lease is extended. Abolishing it removes one of the largest cost items in extensions of short leases, but the practical effect depends on the new deferment and capitalisation rates the Secretary of State sets. Until those rates are published, leaseholders cannot calculate the new premium.

The Act also reforms the costs regime. Currently leaseholders pay reasonable freeholder legal and valuation costs even where they win at tribunal. LFRA 2024 reverses this default — each side pays its own costs except in cases of unreasonable conduct. This is a major saving on smaller claims where freeholder costs can equal or exceed the premium.

Service-charge disputes have grown faster than any other leasehold complaint since 2020. LFRA 2024 introduces standardised transparency:

• Standardised annual service-charge statement. Freeholders and managing agents must provide leaseholders with an annual statement in a prescribed format — line-itemed expenditure, comparison with budget, contractor information, reserves position. The format is to be set in regulations.
• Right to request management documents. Leaseholders can require contracts, insurance schedules, sinking-fund records, and contractor invoices within prescribed time limits. Currently this right is limited under the Landlord and Tenant Act 1985.
• Stronger challenge rights at the First-tier Tribunal. The tribunal can disallow charges where the statement requirements have not been met. Leaseholders no longer pay the freeholder's costs of defending a challenge unless their case is unreasonable.
• Building insurance commissions. Freeholders and managers must disclose commissions received on buildings insurance. Charging commissions hidden in the premium is prohibited from commencement.
• Right to swap to a fixed service-charge regime in some buildings — limited applicability, mainly for retirement leasehold properties and assured tenancy conversions.

The Act also strengthens the Right to Manage. The right is extended to mixed-use buildings (up to 50% commercial, up from 25%). Leaseholders no longer pay the landlord's costs of opposing the claim unless it fails. This is the most-used part of the Act in force since Royal Assent.

Ban on new leasehold houses. From the commencement date (in force since Royal Assent for the main provision, with limited exemptions), most new houses cannot be sold leasehold. Exemptions exist for shared-ownership houses, retirement leasehold houses with care components, and houses on certain National Trust and Crown estates. The freehold sale becomes the default for new builds.

Ground rent for existing leases. LFRA 2024 does not itself reduce ground rent on existing leases — that was deferred to a separate consultation. The Leasehold Reform (Ground Rent) Act 2022 already restricted ground rent on most new leases to a peppercorn (zero), but historic leases on flats with rising ground rents remain unchanged. The current government's policy on capping historic ground rent (a single low-rate cap or a buy-out scheme) is the most-contested remaining piece of leasehold reform.

Forfeiture. Forfeiture — the freeholder's right to take back the lease for breach of covenant — is a draconian remedy used most often for service-charge arrears. LFRA 2024 leaves the substantive law of forfeiture unchanged. The government has consulted separately on replacing it with a more proportionate enforcement regime; legislation is expected in a future Parliament.

Right to Buy and shared ownership. Several modest reforms to shared-ownership leasehold and council-tenant Right to Buy that sit alongside the main leasehold reforms — including improved staircasing rights for shared-owners and tighter information requirements for new buyers.