Leasehold and Freehold Reform Act 2024 What It Actually Changes for Buyers

Buying a leasehold flat in England or Wales means you don't own the building outright. You own the right to live there for a fixed number of years, and when that number gets low, your property becomes harder to mortgage and cheaper to sell. The Leasehold and Freehold Reform Act 2024 is the biggest shake-up to those rules in decades.

It received Royal Assent in May 2024, right at the end of the last Parliament. The government essentially rushed it through before the election, which is good news in principle but created a practical problem. A lot of the Act's most important provisions need secondary legislation, meaning detailed regulations, before they actually switch on. So right now we're in a strange halfway house where the Act exists but chunks of it aren't yet in force.

If you're buying a flat today, you need to understand which parts are live, which aren't, and how to factor that uncertainty into your decision.

Several provisions did come into force on the day of Royal Assent or shortly after, and these are genuinely useful.

The most immediate win is transparency around service charges. Freeholders and managing agents must now provide clearer, more standardised information about what they're charging and why. You still need to scrutinise service charge accounts carefully when buying, but leaseholders have stronger grounds to challenge vague or poorly explained bills.

Building insurance commissions have also been tackled. Previously, managing agents could earn undisclosed commissions from insurers, effectively inflating the premiums you paid through your service charge. The Act requires those commissions to be disclosed and, in many cases, passed back to leaseholders. That's real money back in your pocket.

The right to request information about your landlord's costs has been strengthened too. If you want to challenge a service charge, getting the underlying evidence used to be a battle. It's still not effortless, but the legal footing is firmer.

These changes are in force now. They apply to you the moment you complete on a leasehold property.

Here's where you need to be patient and a bit cautious. The headline reforms, the ones that will genuinely transform the cost of extending a lease or buying your freehold, are not yet live. They need the government to write and pass detailed regulations before they switch on, and as of mid-2025 those regulations haven't been finalised.

The big ones still waiting include the new lease extension term. The Act will eventually allow leaseholders to extend by nine hundred and ninety years rather than the current ninety years. That's transformative. A nine-hundred-and-ninety-year lease is effectively permanent, and it makes the property far simpler to sell and mortgage.

The changes to how the premium you pay for an extension is calculated are also waiting. This includes the abolition of marriage value, which I'll come to in a moment, and changes to the capitalisation and deferment rates used in the valuation. These rates are set by the government and directly determine how much you pay your freeholder. They haven't been set yet.

The right for leaseholders in mixed-use buildings, ones with shops or offices on the ground floor, to collectively buy their freehold is also being extended under the Act, but again the detail is in regulations still being worked on.

For a buyer today, this means you're buying under the current rules, with the reasonable expectation that better rules are coming. That's a meaningful distinction.

Under the current law, which still applies while we wait for regulations, you must own a leasehold property for two years before you can formally apply to extend the lease or buy the freehold through the statutory route. The statutory route is the legal process that forces the freeholder to deal with you on terms set by law.

This rule has not been abolished by the Act. It is one of the things the Act will eventually remove, but that change is tied up in the regulations that haven't come through yet.

So if you buy a flat today with, say, seventy-five years left on the lease, you cannot use the statutory process to extend it for two years. You can try to negotiate informally with the freeholder in the meantime, but they don't have to play ball and they can ask for whatever they like. Some freeholders are perfectly reasonable. Others use that two-year window to extract a premium they wouldn't get through the statutory route.

The practical implication is straightforward. If the lease on a flat you're considering is already short enough to need extending soon, factor in that you'll be waiting two years before you have statutory rights, or you'll need to negotiate from a weaker position. Some buyers ask the seller to start the statutory extension process before completion and then assign it to them. That's a legitimate tactic worth discussing with your solicitor.

Once the relevant regulations commence, the two-year rule will go. New buyers will be able to extend from day one. But we don't have a firm date for that yet.

This is the change that will matter most to buyers of flats with shorter leases, and it's worth understanding clearly even though it isn't live yet.

Marriage value is a concept in leasehold valuation. When a lease drops below eighty years, the law currently requires you to pay the freeholder a share of the increase in value that the extension itself creates. The logic is that extending a short lease makes the property more valuable, and the freeholder gets to share in that uplift. In practice, marriage value can add tens of thousands of pounds to the cost of extending a lease once it falls below eighty years.

The Act abolishes marriage value entirely. Once the relevant regulations are in force, it won't matter whether your lease has seventy-nine years or fifty years remaining. You won't have to pay that extra slice to the freeholder.

For buyers today, this creates a nuanced situation. A flat with, say, seventy-two years on the lease is currently expensive to extend because marriage value applies. Once the regulations come in, that same flat will be cheaper to extend. If you're buying now and you're comfortable waiting for the regulations and then waiting the two-year period if it still applies, you might be buying something that becomes meaningfully more valuable once the rules change.

But that's a bet on timing and political will, not a certainty. Don't buy a flat with a problematic lease purely on the assumption that the regulations will arrive quickly. Make sure the numbers work under the current rules too, or negotiate a lower purchase price to reflect the current cost of extension.

First, always ask your solicitor to check the lease length and report on it specifically. You want to know the exact number of years remaining, not a rough figure. Anything under eighty years needs careful thought. Anything under seventy years is a serious issue for mortgageability right now.

Second, get a lease extension valuation done before you exchange. A specialist leasehold surveyor can estimate what it would cost to extend under current rules. That figure should influence what you offer for the property.

Third, ask whether the seller is willing to start the statutory extension process before completion. If the lease is already short enough that you'll want to extend quickly, this sidesteps the two-year wait entirely. Your solicitor can handle the mechanics.

Fourth, keep an eye on the regulations. The government has said it wants to implement the remaining provisions, and the Law Commission has done years of groundwork. When the regulations do arrive, the landscape for leasehold buyers will genuinely improve. Subscribing to updates from the Leasehold Advisory Service, which is a free government-funded body, is a sensible way to stay informed.

Finally, don't let the complexity put you off leasehold entirely. Millions of people live happily in leasehold flats. The Act, even in its current partial state, has already improved transparency and accountability. The bigger changes are coming. Understanding where we are in that process just means you can buy with your eyes open.

The Leasehold and Freehold Reform Act 2024 is real progress. The transparency and insurance commission changes are already helping leaseholders. The abolition of marriage value and the move to nine-hundred-and-ninety-year extensions will be genuinely transformative when they arrive.

But right now, in mid-2025, the most important changes are still waiting for regulations. The two-year rule still applies. Marriage value still applies to leases under eighty years. You're buying under the old financial rules with the reasonable hope that better ones are coming.

That means doing your homework properly. Check the lease length. Get a valuation. Talk to a specialist solicitor, not just a generalist conveyancer. And price any short-lease risk into what you offer. The reforms are coming. They just aren't fully here yet.