The Leasehold and Freehold Reform Act 2024 becomes law
24th June 2024
The Leasehold and Freehold Reform Act 2024 was given Royal Assent on 24th May 2024, one of the final pieces of legislation before the General Election.
What are the key takeaways from the Act?
- Increases the standard lease extension for both houses and flats to 990 years.
- Makes it cheaper for leaseholders to extend their lease or exercise their collective enfranchisement rights.
- Bans the sale of new leasehold houses (with certain exemptions).
- Removes the two year ownership requirement before the right to extend or buy the freehold can be exercised.
- Increases the pool of leaseholders who can exercise enfranchisement or Right to Manage rights by changing the percentage of commercial floor space from 25% to 50%.
- Increases the transparency of service charges.
Notable things which did not make the Act
No amendments were made to restrict ground rent before the Act received Royal Assent. There had been Law Commission consultations on potentially capping ground rents at £250 per annum, or reduce them to zero, and the Act is seen as underwhelming by many.
Another notable omission from the bill is the prevention of forfeiture, a draconian measure which can possibly be exercised by freeholders to bring the lease to an end.
There is currently no commencement date for the Act and it will be for whoever forms the next Government to decide on when it will be implemented. There may also be further reform.
If you require advice relating to the above, or any property matter, please contact our expert Property team who will be happy to assist.
Article written by Residential Conveyancing Solicitor Ben James.