Leasehold and Freehold Reform Act 2024 explained | August

Leasehold and Freehold Reform Act 2024 explained

The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024 and is designed to make it cheaper and easier for leaseholders in England and Wales to extend their lease, buy their freehold and manage their building. It is being brought into force in stages, and as of June 2026 only some of it is law: the two-year ownership rule and several Right to Manage changes are in effect, while the headline reforms to lease extensions and valuation are still awaiting secondary legislation. This guide explains what the Act changes, what is already in force, what is still to come, and how it connects to the new Commonhold and Leasehold Reform Bill published in 2026.

Leasehold and freehold: the difference

A freehold owner owns the building and the land it stands on outright, with no lease, ground rent or landlord above them. A leasehold owner owns the right to occupy a property, usually a flat, for a fixed term, while a freeholder owns the land and building. A leaseholder typically pays ground rent and service charges, and the lease shortens over time, which is what makes lease extensions and freehold purchases such an important and often expensive part of leasehold ownership.

What the Act changes

The Act is built around a few major reforms. It increases the standard lease extension term to 990 years for both houses and flats, replacing the current 90 years for flats and 50 years for houses. It abolishes marriage value, the extra premium currently payable when extending a lease with under 80 years left, which should make extending a short lease significantly cheaper. It removes the two-year ownership requirement before a leaseholder can act, bans the sale of new leasehold houses, widens access to collective enfranchisement and the Right to Manage, and introduces greater transparency over service charges. Crucially, these reforms commence at different times, so it matters which are already law.

What is already in force

Three sets of changes are in effect as of June 2026.

The two-year ownership rule has been abolished. Since 31 January 2025, a leaseholder no longer has to own a property for two years before extending the lease or buying the freehold, so the right is available immediately on purchase. This was commenced by the Leasehold and Freehold Reform Act 2024 (Commencement No. 2) Regulations 2025.

The Right to Manage has been widened. Since 3 March 2025, the non-residential floor space limit for Right to Manage and collective enfranchisement claims has risen from 25% to 50%, so leaseholders in many mixed-use buildings with shops or offices on the ground floor now qualify where they previously did not. From the same date, leaseholders making a Right to Manage claim generally no longer have to pay the freeholder's costs, removing a significant barrier to taking over management.

Various building safety provisions commenced earlier, building on the Building Safety Act 2022.

Among the self-managing landlords we work with at August, those who own leasehold flats have felt the Act most through these Right to Manage changes, which are live, rather than the valuation reforms that still await commencement.

What is not yet in force

The reforms that most affect the cost of extending a lease or buying a freehold are not yet law.

The 990-year lease extension term, the abolition of marriage value and the new standardised valuation method all require detailed secondary legislation, including prescribed rates, before they can take effect. The government has consulted on the valuation rates, but the regulations are not yet in place, so until they are, the existing valuation rules and lease extension terms continue to apply. A judicial review brought by freeholders challenging the valuation reforms was dismissed, but the main reason for the delay is the sheer volume of secondary legislation the Act requires.

The ban on the sale of new leasehold houses is in the Act but has not yet been commenced. The service charge transparency reforms, including standardised service charge statements and a ban on buildings insurance commissions, also await regulations, following a government consultation on leaseholder protections that closed in September 2025.

In short, the rights that are live today are procedural, around qualifying and managing, while the financial reforms that make extensions and enfranchisement cheaper are still to come.

What comes next: the Commonhold and Leasehold Reform Bill

The 2024 Act is only the first stage. On 27 January 2026 the government published a draft Commonhold and Leasehold Reform Bill, confirmed in the King's Speech on 13 May 2026, which goes considerably further. It proposes to ban most new leasehold flats and make commonhold the default for new blocks, to cap ground rent on existing leases at £250 a year before reducing it to a peppercorn after 40 years, to abolish forfeiture, and to make it easier for existing leaseholders to convert to commonhold.

The Bill remains in draft. The housing minister has signalled that the ban on new leasehold flats is unlikely to commence in this Parliament and may not take effect until the 2030s, while the ground rent cap has been mooted for late 2028. Importantly, existing leasehold flats would not be caught by the ban. Where the 2024 Act already banned new leasehold houses, this Bill aims to complete the picture for flats.

What it means for you

If you are a leaseholder with a short lease, the most valuable reforms, the abolition of marriage value and the cheaper valuation method, are not yet in force, so the cost of extending has not changed. You can, however, act immediately on purchase now that the two-year rule has gone, and you have a stronger route to Right to Manage if your building is partly commercial. Whether to extend now or wait for the valuation reforms is a genuine judgement, and worth taking advice on, because the timing is still uncertain.

If you are a landlord who owns leasehold flats, the practical changes so far are the Right to Manage rules and the coming service charge transparency requirements. New houses you buy will eventually be freehold only, and the direction of travel, through both the Act and the 2026 Bill, is steadily towards more leaseholder control and less ground rent income. Keeping clean records of service charges and lease documents makes it far easier to meet the transparency duties as they arrive.

If you hold leasehold property, keep your lease documents, service charge records and compliance certificates in one place with August.

Frequently asked questions

Is the Leasehold and Freehold Reform Act 2024 in force? 

Partly. It received Royal Assent on 24 May 2024 and is being commenced in stages. As of June 2026 the abolition of the two-year ownership rule (31 January 2025) and the Right to Manage changes (3 March 2025) are in force, but the lease extension, marriage value and valuation reforms are not yet law.

Does the Act abolish marriage value? 

Yes, the Act abolishes marriage value, which should make extending a lease with under 80 years remaining cheaper. This change is not yet in force, because it depends on valuation regulations that have not yet been made.

Are new leasehold houses banned? 

The Act contains a ban on selling new leasehold houses, but it has not yet been commenced. The separate Commonhold and Leasehold Reform Bill, published in draft in 2026, proposes to extend a similar ban to new flats.

What is the difference between the 2024 Act and the Commonhold and Leasehold Reform Bill? 

The 2024 Act is law and focuses on lease extensions, enfranchisement, Right to Manage and service charges. The Commonhold and Leasehold Reform Bill, still in draft in 2026, goes further, proposing to ban new leasehold flats, cap existing ground rents and reinvigorate commonhold.

Disclaimer: This article is a guide and not intended to be relied upon as legal or professional advice, or as a substitute for it. August does not accept any liability for any errors, omissions or misstatements contained in this article. Leasehold law is complex and changing. Always speak to a suitably qualified professional if you require specific advice or information.