In this guide, we break down the latest leasehold reform news, what the new legislation means, when the changes are expected to take effect, and how Shared Ownership is impacted.
What is leasehold?
Leasehold is a form of property ownership where you purchase the right to live in a home for a fixed number of years. While you own the property itself, you do not own the land it sits on, this remains with the freeholder.
As a result, leaseholders often pay:
- Ground rent
- Service charges
- Maintenance or building management fees
These costs can rise over time, and extending a lease or buying the freehold has traditionally been a complex and expensive process. These issues are at the heart of the government’s drive for reform.
For how leasehold impacts living in a Shared Ownership home, you can read our blog on Shared Ownership and Leasehold for more information.
What is the Leasehold Reform Act 2024?
The Leasehold and Freehold Reform Act 2024 is part of the Government’s long-term plan to modernise England and Wales’ leasehold system. The act aims to give homeowners more control, transparency, and security.
The key measures include:
- Longer standard lease extensions (990 years) for leasehold houses and flats
- Removal of the two-year ownership requirement before requesting a lease extension
- Greater transparency around service charges
- Easier and cheaper enfranchisement (buying your freehold or extending your lease)
- A proposed ban on new leasehold homes, pushing developers toward commonhold
A shift toward commonhold - a system where homeowners own their property outright, with no lease length - is central to the Government’s long-term vision.
How could leaseholders benefit from this reform?
The new law aims to simplify the system and reduce long-term costs for existing leaseholders.
Benefits for leaseholders include:
1. 990-year lease extensions
Both flat and house leaseholders will be able to extend their lease by 990 years at a peppercorn ground rent, significantly reducing the need for future extensions.
2. Simpler, cheaper enfranchisement
The act streamlines the process of buying your freehold or extending your lease, aiming to remove unnecessary legal barriers and reduce costs.
3. Greater transparency in service charges
Managing agents and freeholders will have to provide clearer breakdowns of costs, helping leaseholders challenge unreasonable charges more easily.
4. Stronger rights and more control
Leaseholders will benefit from enhanced rights related to building maintenance, dispute resolution, and management decisions.
When does the act become law?
Although the Leasehold and Freehold Reform Act 2024 has passed, many measures still require secondary legislation before being fully implemented.
Some reforms may arrive in stages throughout 2026, while larger structural changes - such as commonhold - will take longer.
The Government has indicated:
- Further consultations will take place in 2025
- A detailed Leasehold and Commonhold Reform Bill is expected in late 2025 despite a legal challenge by big freeholders
- The earliest major changes may come into force from 2026 onwards
For those wondering when it will become law the short answer is: it’s law now, but not yet fully activated.
It’s worth noting that two thirds of landlords believe the government will be unable to bring in leasehold reforms by the end of the current parliament.
How does the Leasehold Reform Act affect Shared Ownership?
Shared Ownership leases operate differently from standard residential leases, so the reforms apply in specific ways.
Lease extensions
Currently, many shared owners can only extend their lease after staircasing to 100%. The reform gives all Shared Ownership leaseholders the right to a 990-year extension, removing barriers and improving long-term security.
Ground rent
Shared Owners usually don’t pay ground rent until they reach 100% ownership. Under the reforms:
- Homes bought before June 2022 may benefit from a peppercorn ground rent when extending
- Homes bought after the 2022 ground rent ban already pay no ground rent
Shared Owners will still continue to pay rent on the unsold share.
Enfranchisement
Shared Owners still cannot buy the freehold unless they have staircased to 100%. They also cannot participate in collective enfranchisement with other leaseholders until they own 100% of their home.
Frequently asked questions about leasehold reform
The Government has proposed a ban on new leasehold houses, and is consulting on whether this should extend to new leasehold flats. While not yet finalised, the long-term aim is for commonhold to become the default form of ownership.
Current leaseholders will benefit from:
- Longer lease extension rights
- Lower ground rents after extension
- Better service charge transparency
- Improved legal protections and scrutiny of freeholders
However, the exact implementation timeline depends on secondary legislation.
Yes, but only certain parts. Shared Owners will gain the right to extend their lease by 990 years but will not gain the right to buy the freehold unless they reach 100% ownership.
