Leasehold reform – commencement dates announced
As you know, the Leasehold Enfranchisement team at Attwaters Jameson Hill has been closely monitoring new developments in leasehold law for several years now. The highly anticipated Leasehold and Freehold Reform Act 2024 (LAFRA) gained Royal Assent earlier this year; however, the vast majority of the provisions it contained were not implemented immediately, with secondary legislation required before they came into force.
A statement made by Minister of State for Housing and Planning, Matthew Pennycook, on 21 November 2024, has now revealed some key commencement dates for LAFRA’s long-awaited provisions.
“Serious flaws”
Mr Pennycook was candid as he admitted that the Act in its current form has “serious flaws”, which must first be rectified with primary legislation before the provisions can come into force.
These flaws include:
- A loophole which means “the Act goes far beyond the intended reforms to valuation and that undermines the integrity of the amended scheme”
- An omission that, if uncorrected, means shared ownership leaseholders would not have the right to extend their lease by 990 years like other leaseholders.
Mr Pennycook added: “We must balance speed with care if we are to ensure that the measures brought into force are to the lasting benefit of leaseholders and residential freeholders […] While we intend to work at pace, we will take the time necessary to ensure the reforms we pass are fit for purpose.
When will leaseholders feel the benefit?
Here is the timeline as we understand it so far:
| Leaseholders will no longer be required to own their property for two years before being able to extend their lease or purchase the freehold | January 2025 |
| Reforms to Right to Manage (increasing the commercial floorspace limit to 50%, reforms to cost and voting rights) | Spring 2025 |
| Whitepaper on commonhold reforms | Spring 2025 |
| Consultation on the valuation rates used to calculate the cost of enfranchisement premiums | Summer 2025 |
| Primary legislation to amend errors mentioned above | Second half of 2025 (no date) |
| Secondary legislation to commence LAFRA (rates) | Second half of 2025 (no date) |
| Draft Leasehold and Commonhold Reform Bill (which will ban ground rent and forfeiture) | Second half of 2025 (no date) |
| Consultation on banning leasehold flats | 2025 (no date) |
Martin Lewis: “Someone really needs to get a handle on this”
Money Saving Expert’s Martin Lewis has spoken out against the renewed delay to a process that has already been painfully slow for leaseholders desperate for some relief. He said: “I can almost hear the collective groan of leaseholders at yet another delay in sorting the leasehold mess out. Someone really needs to get a handle on this.”
However, Mr Pennycook commented in his statement: “This government will not make the same mistakes as the last when it comes to reforming what is, without question, an incredibly complicated area of property law.”
Concerned about a leasehold issue?
In the meantime, the old leasehold system continues to apply for leaseholders, so it is vital to get comprehensive legal advice while we await further news on LAFRA. We are on hand to advise you on your options as we make the transition to the new system. To talk through your leasehold matter with a professional, please contact our Head of Leasehold Enfranchisement, Salvatore Amico, on 0203 871 0039 or email salvatore.amico@attwaters.co.uk
