The Leasehold and Freehold Reform Act 2024 (c. 22) is an act of the Parliament of the United Kingdom relating to changes to the law relating to leasehold and freehold properties.
Background.
History.
The leasehold system in England and Wales originated Middle Ages, but the modern system dates to 1920. "Freeholders" own the land underneath a property and "leaseholders" own the land underneath.
The freeholder is allowed to charge leaseholders a fee for building insurance and maintenance, but these services must be stated in the lease.
Statistics.
As of 2024, leasehold properties accounted for:
Approximately 24% of property transactions across England and Wales in 2022 were leasehold.
In 2024, 36% of properties in London were leasehold, accounting for 36% of all properties in London.
According to the Property Institute, between 2019 and 2024, fees significantly increased across a variety of categories:
The average annual increase in service charge in 2024 was 11%.
Legislative passage.
The act was one of the last bills to be passed and become law before the 2024 general election was called.
Provisions.
The act abolishes the "marriage value" for leases under 80 years.
The legislation requires a greater degree of transparency around service charges, and makes it easier for leaseholders to challenge them in court.
The act abolished the "2 year rule", which was part of the Leasehold Reform Housing and Urban Development Act 1993 and meant leaseholders were required to have been the registered proprietor for 2 years before being able to exercise a statutory lease extension under the act.
Originally, it was planned that the legislation would include a provision to remove or restrict ground rent to , and to ban new properties being sold as leasehold but this was not included in the final legislation.
Implementation.
In bringing certain parts of the act into force, the "bona vacantia" rights of the Duchy of Cornwall were abolished. From this point onwards, the Duchy of Cornwall no longer had the right to the property of people who did not write a will, when they died and lived on the land of the Duchy.
The housing minister after the 2024 general election, Matthew Pennycook, indicated that the new government considered the act to be flawed, and would delay commencing certain parts of the act until it was amended. According to Pennycook,
Flaws in the legislation relating to the cost for a leaseholder to buy a lease have been disputed by Mark Wilson, director of Myleasehold. The decision to delay the implementation of certain parts of the legislation was supported by Natalie Chambers, director of Residential Freehold Association.
In a revised 2025 estimate, the government estimated the cost of implementing the legislation to be approximately £4,000,000,000.