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.
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.
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:
- Extended lease values
- Property marketability
- Sales process efficiency
- Long-term investment potential
Making the Most of the New Rights
For Existing Leaseholders
We recommend:
- Reviewing your current lease length
- Assessing your ground rent terms
- Considering collective enfranchisement
- 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:
- Reviewing your current position
- Assessing your options under the new legislation
- Planning for future lease extensions if needed
- 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.
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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.
