What is the Leasehold and Freehold Reform Act 2024?
The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024. It is the most significant piece of leasehold legislation since the Commonhold and Leasehold Reform Act 2002, and it promises major changes for the estimated 4.98 million leasehold property owners in England and Wales.
The Act builds on years of campaigning by groups such as the Leasehold Knowledge Partnership and the National Leasehold Campaign. It followed the Law Commission's 2020 reports on leasehold enfranchisement, which recommended wholesale reform of the system.
However - and this is critical for anyone making decisions right now - most of the Act's provisions are not yet in force. The Act is what lawyers call "enabling legislation." It sets out what will change, but the detail of how it will work requires secondary legislation (statutory instruments) that the Government has not yet finalised. Until those regulations are laid before Parliament and brought into force, the old rules continue to apply.
Key changes in the Act
Removal of marriage value
This is the single biggest change for short-lease flat owners. Under the current system (the Leasehold Reform, Housing and Urban Development Act 1993), if your lease has fewer than 80 years remaining, extending it triggers marriage value - a payment to the freeholder worth 50% of the increase in your flat's value created by the extension.
The 2024 Act abolishes marriage value entirely. When implemented, this could save flat owners with short leases tens of thousands of pounds. For a London flat worth £400,000 with a long lease and 65 years remaining, the marriage value component alone might currently be £25,000-£35,000. Under the new rules, that would drop to zero.
This is genuinely transformative for anyone with a lease below 80 years. But this provision is not yet in force. As of early 2026, the secondary legislation needed to implement the new valuation method has not been finalised, and marriage value is expected to remain payable until late 2026 at the earliest. The current rules - including marriage value - still apply to every lease extension.
Standard valuation method
Currently, calculating the premium for a lease extension is part science, part negotiation, and part guesswork. Two surveyors can look at the same flat and come up with premiums that differ by 30% or more. This leads to disputes, delays, and expensive tribunal hearings at the First-tier Tribunal (Property Chamber).
The Act introduces a standardised calculation method. The Government is working with the industry to develop prescribed rates and deferment rates that will apply across all lease extension valuations. The goal is to make the process more predictable, faster, and cheaper.
The Law Commission originally recommended using a single prescribed capitalisation rate and deferment rate. The final rates have not yet been published, and they will have a significant impact on actual premiums. Until we see the numbers, it is impossible to say with certainty whether the new method will be cheaper in every case - although the removal of marriage value alone should guarantee savings for leases under 80 years.
Removal of the two-year ownership rule
Previously, you had to have owned your flat for at least two years before you could serve a Section 42 notice to begin the statutory lease extension process. This rule caused real problems in practice. If you bought a flat with a short lease, you were stuck waiting two years before you could do anything about it - all while the lease got shorter and the extension got more expensive.
This provision came into force on 31 January 2025. You can now serve notice to extend your lease immediately after purchasing your flat, with no waiting period. This is particularly helpful for buyers of short-lease flats, as it removes the enforced delay that previously applied.
Longer lease extensions
Currently, a statutory lease extension adds 90 years to your remaining term. The Act increases this to 990 years. In practice, both result in a lease so long that it is effectively permanent, but 990 years brings flat leases in line with what many new-build developments already offer and removes any residual anxiety about future lease length.
Ground rent caps on existing leases
The Leasehold Reform (Ground Rent) Act 2022 already capped ground rents on new leases granted after 30 June 2022 to a peppercorn (zero). But it did nothing for the millions of existing leaseholders paying ground rents that may double every 10 or 25 years.
The 2024 Act includes provisions to cap ground rents on existing leases. The cap mechanism has not been finalised - the Government consulted on several options, including capping at a percentage of the property value or at a fixed monetary amount. Whatever the final approach, it should provide relief for leaseholders trapped with onerous ground rent clauses.
For some flat owners, particularly those with ground rents that have escalated to £1,000 per year or more, this change alone could significantly improve their property's marketability and value.
Easier collective enfranchisement
The Act also makes it easier for groups of flat owners to collectively buy their freehold. It reduces the qualifying threshold (currently, at least 50% of flats in the building must participate) and removes some of the more burdensome procedural requirements. It also extends the right to participate to leaseholders who hold long leases of commercial units within mixed-use buildings, subject to certain limits.
What has not changed (yet)
It is important to be clear about what the Act does not do, at least for now:
- It does not ban new leasehold houses - although the Government has said it intends to do this through separate legislation
- It does not introduce commonhold as a replacement for leasehold - commonhold reform was recommended by the Law Commission but is not part of this Act
- It does not give leaseholders the automatic right to manage - right to manage reform is expected in future legislation
- It does not apply to leases granted by the Crown or the National Trust - these are specifically excluded
When will these changes take effect?
Implementation is being phased. The removal of the two-year ownership requirement came into force on 31 January 2025, which is a welcome first step. However, as of April 2026, the Government has not confirmed dates for the remaining provisions.
The bigger changes - abolishing marriage value, introducing the standard valuation method, and capping ground rents on existing leases - all require detailed secondary legislation covering valuation methodology, prescribed rates, ground rent cap mechanisms, and procedural rules. These are expected late 2026 at the earliest, but the timeline remains uncertain.
The honest answer is: nobody knows exactly when the remaining provisions will come into force. The leasehold reform community has been expecting "imminent" changes for years. The Commonhold and Leasehold Reform Act 2002 took several years to fully implement, and there is no guarantee this will be faster.
Should you wait for the reforms?
This is the question we get asked most often, and our view is that waiting is a gamble with real financial consequences. Here is the thinking:
- There is no confirmed date - "coming soon" has been the message for years. Building your financial plans around an uncertain timeline is risky.
- Your lease is getting shorter every day - if you are at 78 years and wait three years for reforms that may or may not arrive, you will be at 75 years. The flat will have lost value, and any future extension (even under the new rules) will cost more because the base calculation still reflects a shorter lease.
- The final rules may differ - secondary legislation can modify how the Act works in practice. The prescribed rates for the new valuation method could be set at levels that do not deliver the savings people expect.
- If you need to sell, waiting is not realistic - the reforms will not help you if you need to move for work, family, or financial reasons in the next 12-18 months.
- Crossing the 80-year line while waiting is costly - if your lease is at 82 years and you wait for reforms, there is a real risk it drops below 80 years before the changes come in. Under current rules, that triggers marriage value and could add £15,000-£30,000 or more to your extension cost.
Our general advice: if your lease is above 80 years but approaching it, extend now under the current rules to lock in the benefit of avoiding marriage value. If your lease is already below 80 years and you cannot afford to extend, selling to a specialist buyer may be the most practical route.
What should you do right now?
Whatever happens with the reforms, the fundamentals have not changed. A shorter lease means a less valuable flat, fewer potential buyers, and higher future costs. Whether the new rules save you £10,000 or £40,000 on an extension, the best time to act on a short lease is as soon as possible.
If you are unsure what to do, get in touch and we will talk you through your options honestly. We can explain what your flat is worth under the current rules, what an extension might cost, and what a direct sale to us would look like. There is no pressure and no obligation.
For the latest official updates on implementation, see the Government's leasehold reform page. You can also read the Law Commission's original reports for the detailed recommendations that underpinned the Act.