The Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025
Introduction
On 10th February 2025, the UK government published The Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025. This new legislation is a significant development in the ongoing reform of leasehold and freehold tenure in England and Wales.
Key Provisions
The key provisions of the Regulations include:
- Extension of the right to extend a lease: The maximum length of time by which a lease can be extended is increased from 90 years to 990 years, giving leaseholders greater flexibility and security.
- Reduction in ground rent: Ground rents on new long leases of houses and flats will be set at zero, effectively abolishing this outdated and unfair practice.
- Simplified process for acquiring the freehold: The process for leaseholders to acquire the freehold of their property is simplified, making it easier and more affordable.
- Protection for leaseholders from unfair fees: Leaseholders will be protected from unfair fees and charges imposed by landlords.
Commencement Date
The Regulations will come into force on 1st June 2025.
Impact
The new legislation is expected to have a significant impact on the leasehold and freehold property market in England and Wales.
- Increased security for leaseholders: The extension of the right to extend a lease and the simplification of the process for acquiring the freehold will give leaseholders greater security and peace of mind.
- Reduced costs for leaseholders: The abolition of ground rents and the protection from unfair fees will reduce the costs associated with leasehold ownership.
- Stimulation of the property market: The reforms are expected to stimulate the property market by making leasehold properties more attractive and accessible to buyers.
Reaction
The new legislation has been welcomed by campaigners and leaseholder organizations. The Leasehold Knowledge Partnership described it as a “landmark day for leaseholders” that will “transform the lives of millions of people.”
However, some landlords have expressed concerns that the reforms will reduce their income and make it more difficult to maintain their properties.
Conclusion
The Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025 represent a major step forward in the reform of leasehold and freehold tenure in England and Wales. The new legislation will provide greater security and affordability for leaseholders, while also stimulating the property market.
The Leasehold and Freehold Reform Act 2024 (Commencement No. 3) Regulations 2025
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