In May, we reported that the Leasehold and Freehold Reform Act 2024 (“LFRA”) had received Royal Assent, but that it was yet to commence as active law.
Now, as we approach 2025, it is still yet to take effect, and it looks as if the official rolling out of the Act will be delayed into 2026.
In this article, Leasehold Property Expert Niki Adkins gives you an update on when we might see the act come into force.
What will the Leasehold Reform Act do?
The Act appears, on the face of it, to make lease extensions and freehold-purchases cheaper and more accessible for leaseholders; among many other leaseholder-benefits.
The key provisions within the act are as follows:
- Reduce the premium payable for a lease extension or freehold purchase, where a leaseholder’s lease has 80 years left,
- Increase the standard lease extension term to 990 years,
- Remove the leaseholders’ obligations to pay the freeholder’s costs in a lease extension or freehold purchase,
- Introduce obligations for freeholders to make service charge bills standardised, so they can be ‘more easily scrutinised and challenged’.
You can read a full list here.
What is the latest on leasehold reform?
Since the Act received Royal Assent in May, speculations amongst leading commentators have suggested that the introduction of any legislation could be delayed until as late as 2026.
This suggestion has been backed by comments made by the minister for Housing and Planning, Matthew Pennycook. In a recent statement, he said that the Act contains "a small number of specific but serious flaws which would prevent certain provisions from operating as intended".
He also commented: "Switching on the Act in full will therefore take time, but it is important that we get it right".
An outline timetable has also suggested that the Government won’t start consulting on valuation rates until the summer of 2025, so by the time that consultation process has been undertaken, 2026 will be barrelling towards us.
What does this mean for you?
This update will likely be frustrating for leaseholders who have already been waiting for this legislation for several years.
Head of Frettens’ specialist Leasehold Property Team Niki Adkins commented: “We’ve seen many leaseholders stop waiting for the Act to take affect and move forward with their lease extension/freehold purchase anyway.
Leaseholders who want or need to sell or re-mortgage their flats any time soon simply don’t have the luxury of waiting any longer for this long-anticipated legislation, and others are predicting that the new legislation won’t even benefit them as much as they once hoped.
If you’re a leaseholder stuck in this tricky situation, then you might want to speak to someone about it – especially if you’re not sure how to proceed. Any member of my team or I would be happy to talk through your situation with you over a free 30-minute conversation.”
Specialist Leasehold Property Solicitors
Our bright Leasehold Property department is one of the largest and most experienced in the region. They specialise in multiple areas of leasehold law, and would be happy to assist you in getting a lease extension or purchasing the freehold.
If you have any questions following this article, or would like to get in touch to discuss your specific circumstances with an expert, you can get in touch on 01202 499255.
We would be happy to assist you with any leasehold property queries and offer a free initial consultation to all new clients.
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