
At Parkgate, we understand that the upcoming leasehold reform changes in 2025 represent one of the most significant shifts in property ownership that England and Wales have seen in generations. With the Leasehold and Freehold Reform Act 2024 now in place and further primary legislation on the horizon, we’re here to guide you through what these vital reforms mean for property owners and potential buyers.

The Current Landscape and Why Reform Is Needed
The existing leasehold system has long been a source of frustration for many property owners. We’ve seen countless cases where our clients have struggled with unaffordable ground rents, excessive building insurance commissions, and challenging service charges. The current lease arrangements, particularly for leasehold houses and leasehold flats, often leave property owners feeling trapped in an outdated system.

Key Changes Coming in 2025
Removal of the Two-Year Rule
One of the most immediate changes we’ll see in January 2025 is the abolition of the ‘2-year rule’ through the Freehold Reform Act 2024. This means that if you’re considering lease extensions or freehold purchases, you’ll no longer need to wait two years after your property purchase to take action. This change will make the process of extending leases significantly more straightforward and will benefit leaseholders who want to act quickly to protect their investment.
Right-to-Manage Provisions
Coming into force in Spring 2025, these provisions will revolutionise how mixed-use buildings are managed. We’re particularly excited about this change, as it will empower leaseholders to take control of their properties without bearing the freeholder’s costs in most cases. However, we’re awaiting secondary legislation to clarify voting rights and other procedural aspects.
The Leasehold and Commonhold Reform Bill
The second half of 2025 will see the introduction of this groundbreaking bill, which aims to establish commonhold as the default tenure for new properties. This represents a fundamental shift away from the traditional leasehold system towards a more equitable form of property ownership.
Impact on Different Property Types
For Leasehold Houses
The government intends to effectively ban new leasehold houses except in exceptional circumstances. For existing leasehold houses, we’ll see:
- Simplified processes for freehold purchases
- More transparent service charges
- Protection against high ground rents
- Clearer rules around private estate management arrangements
For Leasehold Flats
The reforms will bring significant changes for both new leasehold flats and existing ones:
- A standard lease extension term of 990 years
- Changes to how marriage value is calculated
- Greater transparency in service charges
- Enhanced rights in challenging poor practice
Financial Implications
Lease Extension Costs
We anticipate lease extensions becoming cheaper thanks to:
- Removal of marriage value
- New valuation rates for enfranchisement premiums
- Reduced freeholder’s legal costs
- Simplified calculation methods
Ground Rent Reform
The reforms address one of the most contentious issues in the current system:
- Existing leases with escalating ground rent payments will be converted to low ground rent
- New properties will have ground rent capped
- Better protections against draconian threats of legal proceedings
Professional Standards and Management
The property agent sector will see significant changes with:
- Mandatory professional qualifications for managing agents
- New standards for service delivery
- Enhanced consumer protection provisions
- Stricter oversight of private estate management arrangements
Consultation and Future Developments
The government has announced further consultations on:
- Building insurance reforms
- Service charge transparency
- Enfranchisement premium calculations
- Consumer protection measures
What These Changes Mean for Different Stakeholders
For Current Leaseholders
If you currently own a leasehold property, these reforms will:
- Make lease extension claims more straightforward
- Reduce costs for freehold purchases
- Provide better protection against excessive charges
- Give you more control over property management
For Prospective Buyers
When considering a property purchase:
- New builds will likely be commonhold by default
- Existing leasehold properties will have better protections
- The lease extension process will be more transparent
- Service charges will be more regulated
For Freeholders
The reforms will require:
- Greater transparency in cost calculations
- Changes to management practices
- New approaches to insurance arrangements
- Adaptation to enhanced leaseholder rights
Preparing for the Changes
We recommend taking these steps to prepare for the reforms:
- Review your current lease agreement
- Understand your property’s lease length
- Consider timing for lease extensions
- Assess service charge arrangements
- Stay informed about further consultations
Looking to the Future
As we move towards these changes, the Labour government has indicated that other vital reforms may follow. The final Grenfell inquiry report has also influenced aspects of building safety and management regulations that will be incorporated into these reforms.
How Parkgate Can Help
We’re staying up to date with all developments and are ready to assist with:
- Explaining how the new law affects your property
- Guiding you through lease extension claims
- Supporting freehold purchases
- Advising on right-to-manage options
- Helping with service charge disputes
Conclusion
The leasehold and commonhold reform represents a once-in-a-generation change to property ownership in England and Wales. While some aspects of the reforms await further primary legislation and secondary legislation, the central focus is clear: creating a fairer, more transparent system that will benefit leaseholders for generations to come.
We’re here to guide you through these changes and ensure you make the most of the opportunities they present. Whether you’re dealing with leasehold flats or houses or considering a property purchase, our team of experts can help you navigate these important changes.
For more information about how these reforms might affect your specific situation, please don’t hesitate to contact our team. We’re committed to helping you understand and benefit from these vital reforms as they come into force.