The Leasehold and Freehold Reform Act 2024
What it means for leaseholders extending a lease or buying the freehold
Introduction
Across England and Wales, leasehold ownership has long been a source of confusion and frustration.
When you own a freehold property, you own both the building and the land. With a leasehold property, you own the property itself (often a flat or maisonette) but not the land it sits on. That land is owned by a freeholder, and you hold the property for a fixed number of years under a lease.
Leaseholders will often pay:
Ground rent to the freeholder
Service charges for maintenance, insurance and management of the building
Unlike freehold ownership, a lease gets shorter every year. As the lease reduces, it can start to affect the property’s value and mortgageability.
In practice, many buyers become cautious once a lease falls below around 100 years, and mortgage lenders can become more restrictive as the term reduces further.
To address some of the long-standing concerns around leasehold property, the Government introduced the Leasehold and Freehold Reform Act 2024. This legislation aims to strengthen leaseholders’ rights and simplify the process of extending leases or buying the freehold.
What Has Changed Already
One important reform has already come into force: Removal of the two-year ownership rule
Previously, leaseholders generally needed to own their property for two years before they could exercise the legal right to extend their lease or buy the freehold.
This rule was removed in January 2025, meaning leaseholders can now begin the process immediately after purchasing a property.
What Changes Are Still Coming
Many of the headline reforms within the Act have not yet been implemented and will require secondary legislation.
990-year lease extensions
Under the current system, leaseholders extending their lease receive an additional 90 years.
The Act proposes increasing this to 990 years, but this change is not yet in force.
Abolition of marriage value
Currently, if a lease has less than 80 years remaining, leaseholders must pay 50% of the marriage value to the freeholder when extending their lease.
Marriage value represents the increase in the property's value once the lease is extended, and it can add significant cost to the process.
The Act proposes abolishing marriage value, but this reform has not yet been implemented.
Freeholder costs
At present, leaseholders usually have to pay the freeholder’s legal and professional costs when extending a lease or buying the freehold.
The Act proposes reducing or restricting these costs, although the exact rules are still being developed and are not yet in force.
The Importance of the 80 Year Threshold
One of the most important points for leaseholders to understand is the 80-year lease threshold.
Once a lease drops below 80 years:
• Marriage value becomes payable
• The cost of extending the lease can increase significantly
Although future reforms may remove marriage value, the timing and final structure of the changes remain uncertain.
For many leaseholders with more than 80 years remaining, it may still be sensible to consider extending earlier rather than waiting for reforms that are not yet fully implemented.
Practical Advice for Leaseholders
If you are considering extending your lease or buying the freehold, a few steps can make the process easier.
Check your lease length early
Many leaseholders only look into this when the lease has already become short.
Understand the 80 year rule
Extending before the lease drops below 80 years can often reduce the overall cost.
Seek specialist advice
Lease extensions and enfranchisement are technical processes that usually require both a solicitor and a specialist surveyor.
Extending a lease can help protect the value, mortgageability and saleability of your property.
Conclusion
The Leasehold and Freehold Reform Act 2024 is intended to improve the position of leaseholders and simplify the process of extending leases or buying the freehold. However, many of the most significant reforms including 990-year lease extensions and the abolition of marriage value - these are not yet in force.
For now, the existing system largely still applies.
Understanding your lease length and exploring your options early remains the most effective way to maintain control over the process. If you are considering a lease extension or freehold purchase, Conveyancing Collective can connect you with experienced solicitors and specialist valuers who deal with leasehold matters every day, helping you understand your options before deciding how to proceed.
