The Leasehold Reform Bill


The Leasehold Reform Bill was announced during the Kings speech on 7th November 2023 and published on the 23rd of the same month. The Second Reading followed swiftly just 3 weeks later – a clear indication that Michael Gove’s Levelling Up Committee is fast tracking this bill to try to ensure it is enacted or very close to enactment in advance of the next election. An outcome is predicted for mid 2024.

This bill is the second stage following on from the Leasehold Reform (Ground Rent) Act 2022, which effectively banned attaching ground rents to new leasehold properties by reducing them to a ‘peppercorn’.

In legal parlance, a peppercorn is a metaphor for a very small cash payment or other nominal consideration, used to satisfy the requirements for the creation of a legal contract.

What does it mean for freeholders and leaseholders

This significant piece of legislation aims to reform current leasehold law, the proposed new legislation aims to reform current leasehold law, which is deemed to be in the freeholders’ favour currently, and make good on the Government’s commitment to make it ‘easier, faster, fairer and cheaper’ for leaseholders to extend their lease or purchase the freehold to their property.

‘easier, faster, fairer and cheaper’

For existing leasehold property owners the bill has been long anticipated. The introduction of much needed regulation to the leasehold system is long overdue. The Bill aims to regulate the fees charged by freeholders, and provide leasehold homeowners with greater control over their properties and associated costs.

Greater security for leasehold homeowners

Across the UK and Wales a sizeable percentage of homeowners own leasehold properties. Under the terms of a leasehold, you own the property for the length of your lease agreement with the freeholder, but not the land. At the end of your lease, ownership returns to the freeholder, unless the lease is extended.

Government data suggests there are almost five million leasehold properties in England, which makes up 20 per cent of the current housing stock.”

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Most flats and maisonettes are held under leasehold since more than one property exists on a single piece of land, owned and usually, (subject to the terms of the lease), maintained by the Freeholder. In addition, some houses are sold under leasehold and again the buyer owns the property, but not the land and must pay a ground rent, though this scenario is much less common.

Key points addressed by the Leasehold and Freehold Reform bill


  1. For existing leaseholders in houses and flats the bill primarily aims to make it cheaper and easier to extend the lease or buy the freehold.
  2. Increase the standard lease extension term from 90 years to 990 years for houses and flats, with ground rent reduced to £0.
  3. Remove the requirement for new leaseholders to have owned their house or flat for two years before they can benefit from these changes.
  4. Make buying or selling a leasehold property quicker and easier by setting a maximum time and fee for the provision of information to a leaseholder by the freeholder.
  5. Give leaseholders the right to request information about service charges and the management of their building.
  6. Replace buildings insurance commissions for managing agents, landlords and freeholders with transparent admin fees.
  7. Extend access to “redress” schemes for leaseholders to challenge poor practice.
  8. Scrap the presumption for leaseholders to pay their freeholders’ legal costs when challenging poor practice.
  9. Grant freehold homeowners on private and mixed tenure estates the same rights of redress as leaseholders but not the Right to Manage.
  10. Build on the legislation brought forward by the Building Safety Act 2022, ensuring freeholders and developers are unable to escape their liabilities to fund building remediation work
  11. Allow leaseholders in buildings with up to 50% non-residential floorspace to buy their freehold or take over its management (an increase from 25%).

On the agenda, though not in the draft bill:

The government is still committed to banning new leasehold houses in England and Wales and will be amending the Bill. However, the proposed ban on leaseholds is targeted at new build houses only and will not extend to new flats.

Current status

The proposed Bill is steadily making its way through the House of Commons having passed the First and Second Reading, the Committee Stage, and is now at the Report Stage before passing to the House of Lords.

The Bill does finally grasp the bull by the horns and should ensure that the majority (but not necessarily all) leaseholders are in a stronger position than previously. But don’t hold your breath just yet – even when the Leasehold and Freehold Reform Bill is passed, it will take time for the changes to be implemented because these will require regulations to be created too.

It’s good to see significant change on the horizon and we’ll be following the updates closely to ensure that we are up to speed and ready to support our both our freeholders and leaseholders in the light of these changes and in the day-to-day management of leasehold matters.