Leasehold and Commonhold Reform - An update

On 21 November 2024, the Ministry of Housing published a press release announcing their intention to implement further provisions of the Leasehold and Freehold Reform Act 2024 (‘the Act’) in January 2025 with more changes and updating legislation to come over the course of 2025.

In a statement from Matthew Pennycock, the Minister of State for Housing and Planning, the Government outlined its plan for implementing provisions contained in the Act including: 

January 2025 – First on the Government’s list is to bring into force the provision in the Act removing the current prohibition on leaseholders extending their lease or buying their freehold in the first two years after they are registered as owners of the leasehold interest.

Early 2025 – The Government will consult in respect of the Act’s provisions dealing with the bank on buildings insurance renumerations. The Government will also publish a White Paper on reforms to commonhold. 

Spring 2025 – The Government intends to bring into force provisions in the Act concerning right to manage applications, which extend the right to leaseholders of more mixed-use buildings and also change the costs regime to mean that generally leaseholders making claims will not have to pay freeholders costs associated with the application. 

Summer 2025 – Consultation will open in relation to the rates used to calculate premiums on enfranchisements and lease extensions. After consultation, Parliament will need to approve secondary legislation dealing with supposed flaws in the Act. 

2025 – Consultation will start in respect of service charges and the costs position in relation to claims to the First Tier Tribunal in respect of service charges. The statement suggests that, after consultation, the provisions will be implemented quickly. Also, in 2025 the Government has stated that it will consult in respect of, amongst other things, estate management charges. 

The statement reiterates the position laid out in the King’s Speech to publish a new Draft Leasehold and Commonhold Reform Bill which is to be published in the second half of 2025. The statement includes the following; “A central focus of the Bill will be reinvigorating commonhold through the introduction of a comprehensive new legal framework”. The Government intends to consult in 2025 on the best way of banning new leasehold flats and converting existing flats to commonhold. 

There is also reference to tackling unaffordable ground rents, banning forfeiture, regulating the property agent sector and a consultation on the current section 20 consultation procedure in respect of major works. 

Although only a statement of intention, the Government has made clear its continued commitment to wide leasehold reform and to commonhold becoming the default tenure.  

If you would like any further information, please contact Mark Foxcroft or Zoe McLean-Wells.