Leasehold and Reform Act 2024: What You Need To Know

On 24 May 2024, the long-awaited Leasehold and Reform Act 2024 received its Royal Assent, after being rushed through due to the upcoming general election on 4 July.

The purpose of the Act is to change the landscape of homeownership for the millions of individuals that own leasehold properties, giving them significantly more rights and protections.

Some of the key provisions of the Act are:

Increase the standard lease extension term from 50 years in houses and 90 years in flats, to 990 years.
Remove the 2-year ownership test meaning leases can be extended immediately upon purchase.
Ban on leasehold houses (save for exceptional circumstances). All sales of houses to be freehold only.
The elimination of ‘marriage value’, which should make it cheaper for leaseholders to extend their lease.
With leasehold enfranchisement or Right to Manage, the “non-residential” floor space cap has been increased from 25% to 50%, meaning more mixed-use buildings will now qualify.
A standardised form to be used for service charges demands, giving leaseholders greater scrutiny to challenge costs.
Ability for leaseholders to appoint a managing agent of their own choosing, making it easier for leaseholders to take over the management of their building.

It is important to be aware that although it has received its Royal Assent, it is not yet in force and the expected timeline is still somewhat unknown. There is still much work to do, and it is anticipated by guidance that the Act will come into force in 2025 / 2026.

Whilst the Act is welcome news to leasehold owners, it remains up for debate as to how this will impact the sector. There is concern that the Act has been rushed and proper consideration has not been given.

If you would like advice on this article, or any other property dispute related query you may have, please contact our Property Dispute team.

Sheffield Office: 0114 3497000

Chesterfield Office: 01246 555111

info@brmlaw.co.uk

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