The Benefits of Leasehold Reform: What the New Changes Mean for You

Leasehold reform

As one of the pivotal laws passed just before the dissolution of Parliament for the upcoming general election, the Leasehold and Freehold Reform Act has now officially become law. This significant legislation aims to transform the landscape of homeownership in the UK, bringing more rights, power, and protections to homeowners. In this article, we’ll break down what the Leasehold and Freehold Reform Act entails and what it means for consumers, freeholders, and management companies moving forward.

What is the Leasehold Reform?

Leasehold reform refers to the recent changes in legislation aimed at improving the rights and protections of leaseholders. The new Leasehold and Freehold Reform Act is designed to make homeownership more transparent, fair, and accessible, addressing long-standing issues that have affected leaseholders across the UK.

Key Changes Under the New Act

The Leasehold and Freehold Reform Act introduces several critical changes, including:

  1. Easier and Cheaper Freehold Purchase: The new law makes it simpler and more affordable for leaseholders to buy their freehold. This change aims to empower homeowners by providing them with greater control over their property and reducing the financial burden of purchasing the freehold.
  2. Extended Lease Terms: The standard lease extension term has been increased to 990 years for both houses and flats. Previously, leases were typically extended for 50 years in houses and 90 years in flats. This change provides leaseholders with long-term security without the recurring hassle and expense of future lease extensions.
  3. Transparent Service Charges: Freeholders and managing agents are now required to issue service charge bills in a standardised format. This standardisation aims to make it easier for leaseholders to scrutinise and challenge unreasonable charges, promoting greater transparency and fairness.
  4. Right to Manage: The Act makes it easier for leaseholders to take over the management of their buildings. Leaseholders can now appoint the managing agent of their choice, fostering more responsive and tenant-friendly property management.
  5. Ban on New Leasehold Houses: The sale of new leasehold houses is now banned, except in exceptional circumstances. This ensures that most new houses in England and Wales will be freehold from the outset, eliminating the complexities associated with leasehold ownership.
  6. Redress Schemes: The Act extends access to redress schemes, allowing leaseholders to challenge poor practices. Freeholders who manage their buildings directly are now required to belong to a redress scheme, similar to the requirement for managing agents.
  7. Cost Savings for Leaseholders: Leaseholders will no longer have to pay their freeholder’s legal costs when making a claim, significantly reducing the financial barriers to challenging poor practices and service charges.

Impact on Consumers

For consumers, these changes mean a fairer, more transparent, and less burdensome homeownership experience. The ability to extend leases to 990 years removes the anxiety of future lease negotiations, providing a sense of permanence and security. Furthermore, the ban on new leasehold houses ensures that future homeowners will avoid the pitfalls associated with leasehold properties.

The standardisation of service charge bills and the enhanced ability to challenge unreasonable charges empower leaseholders to better understand and manage their financial obligations. By removing the requirement to pay the freeholder’s legal costs, leaseholders are more likely to pursue justice without fear of prohibitive expenses.

Impact on Freeholders and Management Companies

Freeholders and management companies will need to adapt to the new regulations by ensuring greater transparency and fairness in their dealings with leaseholders. The requirement to issue standardised service charge bills means that these entities must adopt clearer accounting practices and be prepared for increased scrutiny.

The new right to manage provisions will also require freeholders to be more responsive to the needs and preferences of leaseholders. While this may pose an administrative challenge, it ultimately leads to a more cooperative and tenant-focused approach to property management.

Future Implications

Looking forward, the Leasehold and Freehold Reform Act sets a precedent for ongoing improvements in the housing sector. By addressing long-standing issues and promoting fairer practices, this legislation paves the way for a more equitable property market. Future reforms may continue to build on this foundation, further enhancing the rights and protections for homeowners.

The increased transparency and reduced costs associated with leasehold properties are likely to boost consumer confidence and satisfaction. This, in turn, could stimulate the property market, encouraging more people to invest in homeownership without the fear of hidden charges and unfair practices.


The Leasehold and Freehold Reform Act represents a significant step forward in the UK housing market. By making it easier and cheaper for leaseholders to buy their freehold, extending lease terms, ensuring transparent service charges, and banning new leasehold houses, the Act provides a fairer and more secure future for homeowners.

These reforms not only enhance the rights and protections of leaseholders but also promote a more transparent and equitable property market. As the changes take effect, consumers, freeholders, and management companies alike will need to adapt to the new landscape, paving the way for a more balanced and fair homeownership experience in the UK.

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