Answers · UK 2025/26
How does the Leasehold and Freehold Reform Act affect leaseholders in 2026?
The Leasehold and Freehold Reform Act 2024 makes significant changes for leaseholders: it removes the 2-year ownership requirement before you can extend your lease or buy the freehold, bans new leasehold houses, improves service charge transparency, and caps ground rent during lease extensions. Provisions are being commenced in stages.
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**Key changes under the Leasehold and Freehold Reform Act 2024** **1. Abolition of the 2-year ownership rule** Previously, leaseholders had to own their property for at least 2 years before they could apply for a lease extension or collective freehold purchase. This requirement is removed — leaseholders can now exercise rights immediately after purchase. **2. Ban on new leasehold houses** New houses in England and Wales can no longer be sold as leasehold (with some narrow exceptions for shared ownership and certain community land trust arrangements). Existing leasehold houses are unaffected but have enhanced rights. **3. Ground rent in lease extensions** When a statutory lease extension is granted, ground rent is reduced to a peppercorn (£0). This was already the case; the Act strengthens protections and improves the process. **4. Service charge transparency** Freeholders and managing agents must provide improved, standardised service charge accounts. Leaseholders gain enhanced rights to challenge unreasonable service charges through the First-tier Tribunal. **5. Estate management charges** Freeholders who charge estate management fees (e.g. on freehold estates with communal areas) face similar transparency requirements and tribunal oversight as leasehold service charges. **What is NOT yet in force (as at mid-2026)?** The marriage value reform (abolishing or reducing the 50% marriage value payable when a lease is under 80 years) was announced by the previous government but is not yet enacted. The current government has indicated it will consult further. Verify current position before relying on this. **Example: James, just purchased a leasehold flat** Under the old rules, James had to wait 2 years before extending his 79-year lease (which would then pass the 80-year marriage-value cliff). Under the 2024 Act, he can apply for a lease extension immediately after completion — before the lease reaches 80 years — potentially saving significant money in marriage value. **Key action for leaseholders** If your lease has fewer than 90 years remaining, get a professional valuation now. Extending sooner (above 80 years) avoids marriage value and future cost increases.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.