The Leasehold and Freehold Reform Act 2024 and what has actually changed

When did the Leasehold and Freehold Reform Act 2024 become law?

The Act received Royal Assent on 24 May 2024, in the final days of the previous Parliament before the general election. It was passed under significant time pressure, which means some provisions were included in skeleton form requiring secondary legislation to bring them into practical effect. The new Labour government has committed to implementing the Act's provisions and to going further with additional leasehold reform, but the timeline for secondary legislation is still emerging.

This means the position is currently a mixture: some parts of the Act are already in force, others are not yet operative, and a few are still being consulted on. For any specific action you are considering, checking the current status of the relevant provision is important.

What changes are already in force?

The most significant change already in force is the removal of the two-year ownership requirement for lease extensions and collective enfranchisement. Previously, leaseholders had to have owned their flat for at least two years before they could exercise the right to extend their lease or join a collective enfranchisement claim. That requirement has been abolished. You can now act as soon as you complete a purchase.

The Act has also removed the requirement for leaseholders to pay the freeholder's legal and other professional costs when making a Right to Manage claim. Under the previous rules, even where a claim was uncontested, leaseholders had to cover the freeholder's reasonable costs. This was frequently used as a deterrent. Removing it makes the RTM process meaningfully cheaper and more accessible.

What changes are still to come?

The most significant pending change is the reform of lease extension and enfranchisement premiums. The Act changes the methodology for calculating how much leaseholders pay to extend their lease or buy their freehold, in ways intended to reduce the cost. However, these provisions require secondary legislation in the form of new valuation regulations, which have not yet been made. Once in force, these changes are expected to reduce costs for many leaseholders significantly.

The Act also contains provisions to improve transparency around service charges and to require insurance information to be shared more openly with leaseholders. These are being brought in over time.

What does the Act say about commonhold?

The Leasehold and Freehold Reform Act 2024 includes provisions to facilitate a move towards commonhold as the default form of flat ownership for new developments. Commonhold is a form of ownership in which individual flat owners own their units outright and collectively own and manage the common areas through a commonhold association. It exists in law since 2002 but has barely been used in practice.

The government has signalled that it intends commonhold to become the default for new residential developments, which would represent a fundamental shift in how flat ownership works in England and Wales. For existing leasehold buildings, conversion to commonhold is theoretically possible but the practical mechanisms for this are still being developed.

What does the Act change for the Right to Manage?

Beyond removing the obligation to pay freeholder costs, the Act widens the Right to Manage to cover a broader range of buildings, including some mixed-use properties that were previously outside the qualifying criteria. The share of commercial space that disqualifies a building from RTM has been adjusted, which may bring some previously excluded buildings within reach.

The Act also makes changes to how RTM works in relation to estate management charges, which affect leaseholders on estates as well as in individual blocks. If you previously looked at RTM and found your building did not qualify, check if your building qualifies again under the updated rules.

What has not changed yet?

Ground rent on existing leases has not been capped or abolished. The government has consulted on this but no legislation has been passed. If your lease contains a ground rent clause that was granted before 30 June 2022, that clause remains in force. The position on existing ground rents remains one of the more contentious unresolved issues in leasehold reform.

The detailed valuation rules for lease extensions and enfranchisement premiums are also still pending secondary legislation. Many leaseholders are waiting for these rules to come into force before deciding whether to proceed with an extension or enfranchisement, on the basis that the new rules are expected to be more favourable.

Where can you find out more?

The Leasehold Advisory Service at lease-advice.org keeps up-to-date guidance on which parts of the Act are in force and what they mean in practice. You can also read the full text of the Act at legislation.gov.uk.

For leaseholders who want to take action now rather than waiting for further reform, the Right to Manage remains the most accessible route to taking control of how your building is managed. Read about the full RTM process to understand what is involved.

This article is for educational purposes only and does not constitute legal advice. Every situation is different — if you need guidance specific to your building or lease, please consult a qualified solicitor.