The Leasehold and Freehold Reform Act (LAFRA) received royal assent on 24 May 2024. The reform is intended to improve the rights of long leaseholders of residential properties in England and Wales, bringing in some significant changes.
Extensive changes were set to come into play from 24 July 2024, however, given that this was a longstanding Conservative manifesto, and we are now in the early days of a new Labour Government, we will wait to see if, when and how quickly the rest of the Act will be implemented!
Below are the key provisions set out in the LAFRA:
- Extended Lease Terms: Lease terms are extended to 990 years with minimal peppercorn ground rent, making long-term ownership more secure and affordable.
- New House Rules: The Act bans leasehold tenure on newly built houses, ensuring future homeowners get freehold ownership.
- Immediate Lease Extensions: Homeowners can extend their leases or purchase freeholds immediately, offering greater flexibility.
- No More Marriage Value: The cost of extending leases or buying freeholds will no longer include the marriage value, which often increases prices.
- Mixed-Use Building Adjustments: The amount of non-residential space allowed in mixed-use buildings is increased, making these properties more versatile.
- Service Charge and Insurance Transparency: New protections ensure clearer and fairer service charge and insurance fee structures.
- Tenant Rights: Tenants gain new rights concerning litigation costs and property management standards. Landlords or estate agents must also belong to an approved redress scheme and follow best practice codes.
Leasehold and Freehold Changes
If you are a leaseholder, property developer, landlord or homeowner, then you may be concerned about how the proposed changes will impact you and your property portfolio.
We may be some way off knowing when the reforms will come into place, but it is likely to be gradual throughout 2025-2026, depending on the new government’s stance on the Act.
Please reach out to our Residential Property Team if you have any immediate concerns or questions regarding your leasehold or freehold properties.
Call us on 01253 362 500 or complete the contact form on our website for a legal expert to call you back at a convenient time.
