Leasehold Reform 2024

Industry insights

Leasehold Reform 2024: What the New Law Means for Your Property Rights

As leading lease extension specialists at Fradleys, we’ve been closely monitoring the transformative changes brought about by the Leasehold and Freehold Reform Act 2024. This landmark legislation represents the most significant overhaul of property rights in recent history, and we’re here to guide you through what these changes mean for your property.

Understanding the New Landscape of Property Rights

The Freehold Reform Act 2024 received royal assent in May 2024, marking a watershed moment for property owners across England and Wales. As experts in this field, we’ve observed how these reforms will strengthen existing consumer rights and benefit leaseholders in unprecedented ways.

Key Changes for Leasehold Property Owners

One of the most significant changes we’re excited to share is the new standard lease extension term of 990 years. This dramatic increase from the previous 50 years for houses and 90 years for flats means you can enjoy secure ownership without worrying about future lease extensions. This change alone will help maintain your property value and provide long-term security.

For our clients with leasehold houses, the new law introduces a complete ban on new leasehold houses, except in exceptional circumstances. This represents a fundamental shift in how property ownership will work moving forward, although existing leases will remain in place but with enhanced protections.

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Cost Savings and Financial Benefits

We’ve analysed how the Freehold Reform Act will make lease extension cheaper and more accessible:

Ground Rent Reform

One of the most pressing issues we’ve helped clients with has been high-ground rents. Under the new legislation:

  • Existing leaseholders can buy out their ground rent without extending their lease
  • New leasehold flats will have restrictions on ground rent charges
  • The process for getting ground rent reduced has been simplified

Reduced Legal Costs

A significant victory for leaseholders is that they will no longer have to pay freeholders’ legal costs when making statutory lease extension claims. This change removes a substantial financial barrier that previously deterred many from pursuing their rights.

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Service Charges and Building Management

Greater Transparency

We’re particularly pleased about the new requirements for managing agents. They must now:

  • Issue bills in a standardised format
  • Provide clearer breakdowns of service charges
  • Join mandatory redress schemes

Building Insurance Reform

The new law tackles excessive building insurance commissions, replacing them with transparent handling fees. This reform addresses a long-standing concern among our clients about opaque insurance arrangements.

Impact on Freehold Homeowners

The legislation doesn’t just benefit leaseholders; it also grants freehold homeowners on private estates and mixed tenure estates new rights:

  • Better information about estate charges
  • Access to redress schemes
  • Rights to challenge unreasonable fees

The Future: Commonhold Reform and Labour Government Plans

The new Labour government has pledged to introduce further primary legislation through a commonhold reform bill. We’re following these developments closely, particularly the proposals to:

  • Make commonhold the default tenure for new developments
  • Address issues in private estates
  • Further, strengthen existing consumer rights

What These Changes Mean for Different Property Types

For Leasehold Flats

If you own a leasehold flat, you’ll benefit from:

  • Simplified lease extension claims
  • Better protection against poor practice
  • More control over building management
  • Enhanced rights when your lease drops in length

For Houses

The ban on new leasehold houses means:

  • Future homes will be sold as freehold property
  • Existing leaseholders have stronger rights
  • Easier paths to freehold acquisition

Practical Steps and Timeline

Implementation Schedule

While the Freehold Reform Act 2024 is now law, many provisions require secondary legislation before taking effect. We’re actively monitoring these developments and expect:

  • Further consultation on specific measures
  • Gradual rollout of different provisions
  • Additional guidance from HM Land Registry

How We Can Help

As lease extension specialists, we’re here to:

  • Guide you through the new processes
  • Handle legal proceedings
  • Manage statutory lease extension claims
  • Advise on marriage value implications
  • Support challenging poor practice

Impact on Property Values

Based on our experience, these reforms will likely positively affect:

Making the Most of the New Rights

For Existing Leaseholders

We recommend:

  1. Reviewing your current lease length
  2. Assessing your ground rent terms
  3. Considering collective enfranchisement
  4. Exploring management options

For Prospective Buyers

Consider:

  • The implications of lease length on property value
  • New protections under existing legislation
  • Opportunities for secure ownership
  • Future lease extension requirements

Looking Ahead: The Future of Property Rights

The leasehold reform 2024 represents just the beginning of a broader transformation in property rights. We anticipate:

  • Further reforms under the Labour government
  • Additional consumer protections
  • Evolution of commonhold options
  • Enhanced transparency requirements

Conclusion

As experts in leasehold and freehold reform, we’re excited about these changes and their potential to revolutionise property ownership in England and Wales. The new law makes lease extensions cheaper, provides better protection against excessive building insurance commissions, and gives leaseholders greater transparency over their properties.

Next Steps

We recommend:

  1. Reviewing your current position
  2. Assessing your options under the new legislation
  3. Planning for future lease extensions if needed
  4. Consulting with specialists about your specific situation

At Fradleys, we’re committed to helping you navigate these changes and make the most of the new opportunities they present. Whether you’re dealing with service charges, considering a lease extension, or exploring freehold acquisition, our team of specialists is here to help.

Get in Touch

If you’d like to discuss how the leasehold reform 2024 affects your property rights or need assistance with any aspect of leasehold property management, please contact our team. We’re here to help you understand and benefit from these significant changes in property law.


This article was last updated on 18 December 2024. Please note that as secondary legislation and further consultation processes continue, some details may be subject to change. We’ll keep you updated as new developments emerge.

Call us on: 020 8940 2991

Email: info@parkgate.co.uk

Visit us: 8 Eton Street, Richmond, London TW9 1EE

Frequently Asked Questions About the Leasehold Reform 2024

1. How Will the New Law Affect My Ground Rent?

Under the leasehold reform 2024, ground rent has seen significant changes. The new legislation allows existing leaseholders to buy out their ground rent without requiring a lease extension. This is particularly beneficial if you’re paying high-ground rents or facing escalating charges. You’ll be able to:

  • Purchase your ground rent independently of other lease changes
  • Reduce ongoing costs
  • Improve your property’s marketability
  • Avoid future ground rent increases

2. What is the New Standard Lease Extension Term?

The standard lease extension term has been dramatically increased to 990 years for both houses and flats. This change represents a significant improvement from:

  • Previous 50-year extensions for houses
  • Former 90-year extensions for flats
  • Old requirements for multiple extensions

This extended term essentially gives you permanent secure ownership and eliminates the need for future lease extensions, potentially saving thousands in future costs.

3. Do I Still Need to Pay My Freeholder’s Legal Costs for Lease Extension Claims?

One of the most significant changes in the Freehold Reform Act 2024 is that leaseholders no longer have to pay freeholders’ legal costs when making statutory lease extension claims. This means:

  • You only pay your own legal fees
  • The process becomes more affordable
  • There’s less financial risk in pursuing your rights
  • You can challenge poor practice without fear of excessive costs

4. How Does the Ban on New Leasehold Houses Work?

The ban on new leasehold houses is comprehensive but does include some exceptional circumstances. Here’s what you need to know:

  • All new houses must be sold as freehold property
  • Existing leasehold houses retain their status but with enhanced protections
  • Shared ownership properties may have different rules
  • Certain community-led housing schemes may be exempt

5. What Changes Are Coming for Service Charges and Building Management?

The new law introduces significant reforms to how service charges are managed and scrutinised. Managing agents must now:

  • Issue bills in a standardised format
  • Provide detailed breakdowns of costs
  • Join mandatory redress schemes
  • Eliminate excessive building insurance commissions

These changes give leaseholders greater transparency and more control over their service charges, making it easier to challenge unreasonable fees and ensure value for money.

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Thank you to the Park gate team for a smooth process, always on the spot and available to help.
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13:51 06 Aug 24
It is a pleasure to work with Parkgate. They have supported us all the way through from booking our initial viewing all the way through to managing the rental we are in now. Mark Langham was so quick to help us with our application, provide feedback from landlord on our approval, and get us through the process to secure the tenancy.Jonathan is our managing agent, and he regularly check in to see how things are going and are quick to respond with any issues. They have also scheduled maintenance and painting for us and have made recommendations and advocated on our behalf to the landlord for additional maintenance and improvements.
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I've used Parkgate in Richmond for over 15 years now. They have always found excellent tenants for my properties. They never fail to be friendly, supportive and very professional. Any queries or concerns I may have are instantly responded to. Can highly recommend them.
I cooperate with the agency as a tenant and completely pleased with the service of its agents. They are always ready to help with any property issue as soon as possible, promptly reply and react to any kind of enquiry. Special thanks to Jola for her pleasant communication style!
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04:43 27 Jul 24
We purchased a house recently with Parkgate by a perfect service. I was in contact with Jonathan and Klaudia who are really professionals. They were easy to reach, fast acting and especially fair and honest. They were so straight forward that we managed the completion within a very short period. I reached them so easy whenever I need to talk over the phone or in person. I will never forget Klaudia’s good luck to us at the first viewing of property. We decided to buy at that first day and all was done so fast. They carried out all paper works so smooth and clear. I would highly recommend Parkgate. Thanks again to Jonathan and Klaudia.
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I live in St Margarets road Parkgate is the one of the absolute greatest estate agents. I'd like to thank you to Susie and Jola for all your help these past few months. Your hard work helped me to get my dream home, and I couldn't be more grateful or excited about milestone. Thank you again for all your care and attention. You guys are the best!
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Really pleased with Parkgate. They manage my flat in Richmond. Because they're local they actually visit the flat regularly and use trusted local suppliers to deal with issues / maintenance etc. I find they are a reliable and easy agency to deal with, which reduces stress. Strongly recommend!
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Very responsive, informative and always kind people. We didn't have much time, but they helped us with creating some time in their agenda and squeezing us in. We rented our place just in time, thanks to them.
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12:21 22 Feb 23
Parkgate has been my agent of choice for a number of years now and has secured good tenants for my properties. They are hard working, respond in a timely manner and best of all are always friendly rather than aggressive or overbearing, which is the case with many of their competitors.
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15:01 02 Feb 23
Excellent service throughout.We rented a property that they manage for 4 years.Parkgate team is very professional and approachable. Way better than dealing with a big agency, they offer a more personal approach, always available and willing to solve any issues.From the tenancy agreement to handing the property back, it has been a real pleasure working with them.
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12:16 30 Aug 22
I have had an eight year relationship with Parkgate, in fact they originally sold my flat to me 12 years ago in Putney. Their service and professionalism is unrivalled. They managed the leasing of my flat from 2014 and assisted me to negotiate the successful sale just now in 2022. Chris has been there throughout with an open door and no request too trivial to assist. Klaudia negotiated my sale and worked with amazing tenacity throughout. I would not hesitate to recommend Parkgate to anyone in the Putney/Richmond area, they know their stuff.
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10:16 31 Jan 22
We have had a wonderful experience with Parkgate and would highly recommend them. Chris was brilliant on the valuation - what we liked is he was totally honest about our chances of selling and gave us the positives and negatives about our property (such as facing a council estate!). Other agents tend to just gush over the good bits which is great, but actually not that helpful.The selling process was great - we were given good feedback from the viewings and got the price we wanted within about 8 weeks.We really have nothing but praise for Klaudia and Chris, it's been really enjoyable, easy and stress free and we will be recommending Parkgate to all our friends in the area and our building.***** Thank you! *****