The Leasehold and Freehold Reform Act 2024 – An Update

You may recall, in our previous Blog ‘Does the New Labour Government Mean The End of Leasehold Properties For Good?’ we discussed the Leasehold And Freehold Reform Act 2024, which had received Royal Assent prior to the dissolution of Parliament before the general election.

On 21 November 2024, Matthew Pennycook, Minister of State for Housing and Planning issued a statement on Leasehold and Commonhold Reform.

In the statement, Matthew Pennycook reiterated the Labour Government’s commitment to Leasehold and Commonhold Reform:

“Over the course of this parliament, the government is determined to honour the commitments made in our manifesto and do what is necessary to finally bring the feudal leasehold system to an end. Given that millions of leaseholders and residential freeholders are currently suffering as a result of unfair and unreasonable practices, we appreciate fully the need to act urgently to provide them with relief. However, we are also cognisant of the significant complexity of the task and the importance of taking the necessary time to ensure that reforms are watertight.

With both of these imperatives in mind, I am today updating the House on the steps the government intends to take to implement those reforms to the leasehold system already in statute and to progress the wider set of reforms necessary to end the feudal leasehold system for good.”

The previous Government is criticised in the statement, ‘…the 2024 Act contains a number of specific but serious flaws which would prevent certain provisions from operating as intended and that need to be rectified via primary legislation.’

It is for this reason that much of the 2024 Act will not be implemented for quite some time.

Some of the provisions, relating to the legal costs associated with the remediation of unsafe buildings, came into force on 24 July 2024. Further building safety measures were implemented on the 31 October 2024.  I do not intend to details those provisions here.

The Labour Government have confirmed that an extensive programme of detailed secondary legislation is needed to implement the remaining provisions in the Act, and it is those provisions, which mainly relate to Lease extensions and the acquisition of the freehold of your building, that we are waiting for.

It looks as though we may be waiting quite some time yet, as the statement indicates that it may be mid to late 2025 or early 2026 before we see any real meaningful change.

The Government does, however, state that it intends to commence the Act’s provision to remove the ‘2 year rule’ in January 2025.  Under the current applicable legislation, which is the Leasehold Reform, Housing and Urban Development Act 1993, you have to have been the registered proprietor of your leasehold flat for at least 2 years before you can claim your statutory right to a Lease extension. If the Government does follow through with this element of the 2024 Act, you will no longer have to have owned your flat for 2 years to claim your statutory right to a Lease extension.

The Government will not consult on the valuation rates, regarding the cost of enfranchisement and premiums, until Summer 2025. There will then need to be secondary legislation and fixed to the primary legislation.

The Government also stated that it will publish a new draft Leasehold and Commonhold Reform Bill in the second half of 2025, which, it calls ‘ambitious’ and will go further to implement the Law Commission’s recommendations, which were omitted from the 2024 Act.

So, the moral of this short Blog is that there is still a long way to go, and some time to wait, before we see any real and meaningful change to the leasehold enfranchisement process.

Please note the above is for information purposes only and is intended to be a short summary. It should not be treated as a comprehensive guide and should not be acted on without qualified legal advice.