Claire Bessant-Nicholls

Solicitor

Previously a leaseholder must have owned their flat or house for two years before applying to extend their lease or buy their freehold using the statutory route, but the removal of the two-year ownership rule on 31^st January 2025 heralds a new era for lease extensions and freehold enfranchisement.

 

The Leasehold and Freehold Reform Act 2024 which strengthens existing leaseholder rights by, for instance, making it easier and cheaper for leaseholders to extend their lease or buy their freehold, and introduces new rights became law on 24^th May 2024.  The main provisions of the Act will not, however, have effect until secondary legislation is passed.

 

One such piece of legislation, The Leasehold and Freehold Reform Act 2024 (Commencement No 2 and Transitional Provision) Regulations 2025, came into force on 31^st January 2025.  This repeals the two-year ownership requirement of the Leasehold Reform Act 1967 and the Leasehold Reform Housing and Urban Development Act 1993 and means that qualifying leaseholders will now no longer need to wait for two years after purchasing a leasehold property before exercising their statutory right to extend the lease of a flat or to buy the freehold to a long leasehold house.  Instead, leaseholders can now serve a notice of claim on the landlord as soon as they can demonstrate that they are the new legal owner of the property.  In practice, this means that a leaseholder will still need to wait until the property has been registered in their name at the Land Registry before serving notice.

 

Other changes which have yet to come into effect include the introduction of a new standard 990 lease term for both houses and flats – increased from 50 years for houses and 90 years for flats – with zero ground rent but the implementation of this reform will also require secondary legislation and it is not yet clear exactly how the cost of these lease extensions will be calculated.