The UK government has released a new update on its long-promised leasehold reform, marking an important step forward for millions of homeowners across the country. These reforms are expected to simplify and reduce the cost of extending leases or buying freeholds, while also giving leaseholders more rights and control over their homes.
The proposed changes aim to fix long-standing issues in the leasehold system — a property ownership model where a person owns their home for a fixed number of years but not the land it stands on. Under this system, many homeowners have faced increasing costs, unclear fees, and limited decision-making power, which the government now aims to address through major reform.
According to the update, the changes could make it significantly easier and cheaper for leaseholders to extend their lease agreements, purchase their freeholds, or even take over the management of their buildings. These adjustments will also improve fairness and transparency across the housing sector, giving homeowners more clarity about their rights and financial responsibilities.
The Leasehold and Freehold Reform Act 2024 (LAFRA) received Royal Assent earlier this year under the previous government, but most of its major sections have yet to come into effect. Parliament has confirmed that many details of the new law will still require additional consultation and secondary legislation before full implementation can begin.
The Labour government, which is now overseeing the rollout, has said it is committed to putting the new rules into action “as quickly as possible.” However, officials have also acknowledged that the process is highly complex and that it’s essential to take the time needed to ensure that the reforms are implemented correctly and “watertight.”
In its latest report, the government admitted that a small number of “specific but serious flaws” had been identified within the Act. These issues will need to be corrected through primary legislation, meaning that further amendments will be introduced to Parliament before the Act can be fully operational.
Housing Minister Matthew Pennycook provided an update on 10 October 2025, outlining how the government plans to make leasehold practices fairer and clearer for property owners. He referred to the progress already made under the Leasehold Reform (Ground Rent) Act 2022, which banned most new ground rents for long residential leases in England and Wales.
The 2022 Act made it illegal for landlords to charge excessive ground rents on new leases. Instead, all new long-term residential leases must be limited to a “peppercorn” rent — a legal term meaning zero financial value. This measure took effect in June 2022 and was later extended to include retirement homes in April 2023, providing stronger protection for older homeowners.
Pennycook reaffirmed that the government remains “firmly committed” to tackling unregulated and unaffordable ground rents. He confirmed that new legislation would be introduced to expand on the protections already in place and ensure that leaseholders are no longer burdened by unfair costs imposed by landlords.
According to Parliament’s recent statement, the Leasehold and Freehold Reform Act 2024 will deliver a series of major benefits for leaseholders. One of the most significant is that it will make extending leases or buying freeholds both cheaper and simpler by removing the controversial “marriage value” payment — a charge that has long been criticised for inflating the cost of lease extensions.
Another key change under the new law will see the standard lease extension term increased to 990 years, with ground rent permanently reduced to a peppercorn. This means that leaseholders will gain near-freehold ownership of their properties, giving them long-term financial security and eliminating the risk of leases running down.
The reforms will also expand eligibility, allowing more leaseholders to qualify for these rights. Whether they own a flat or a house, more people will now be able to extend their lease, purchase their freehold, or take over building management — something that has previously been restricted to certain ownership types.
In addition, the new Act will ban the creation of new leasehold houses, except in limited circumstances such as shared ownership or special cases where leasehold structures are necessary. This move aims to stop developers from selling new-build homes as leasehold properties, a practice that has been widely criticised for trapping buyers in costly arrangements.
Transparency is another major focus of the reforms. The legislation will require landlords and managing agents to clearly outline service charges, insurance commissions, and other administrative fees. Leaseholders will also gain a new legal right to request detailed information about how their buildings are managed, ensuring that costs are both reasonable and transparent.
The government also plans to remove the presumption that leaseholders must automatically pay their landlord’s legal costs when challenging poor management or unfair practices. Instead, leaseholders will have the right to apply to claim their legal expenses back from the landlord, which will help to level the playing field in disputes.
Access to redress schemes will also be expanded, giving leaseholders more options to resolve disputes when freeholders manage properties directly. Furthermore, the reforms will ensure that essential property information is shared promptly during sales, helping buyers and sellers avoid unnecessary delays or hidden issues.
Altogether, these reforms mark one of the most significant overhauls of the UK’s leasehold system in decades. By reducing costs, extending ownership rights, and improving transparency, the government aims to create a fairer and more affordable property market — one where homeowners can have greater confidence and control over the places they call home.
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