UK · Leasehold · LAFRA 2024
Leasehold and Freehold Reform Act 2024: What Changed
What the Leasehold and Freehold Reform Act 2024 actually changes for leaseholders — lease extension, Right to Manage, service charges, insurance commissions and ground rent — and which parts are still not in force.
24 May 2024
Royal Assent of the Leasehold and Freehold Reform Act
990 years
New statutory lease extension term for flats and houses
50%
New non-residential floor space limit for RTM eligibility
Source: Leasehold and Freehold Reform Act 2024 (legislation.gov.uk) · Leasehold Reform (Ground Rent) Act 2022
Direct answer
The Leasehold and Freehold Reform Act 2024 got Royal Assent in May 2024 but is being brought into force in stages, not all at once. Confirmed changes include a longer 990-year statutory lease extension, removal of the two-year ownership wait before extending a lease, a raised 50% non-residential limit for Right to Manage, a ban on buildings insurance commissions, and stronger service charge transparency rules. It does not retroactively reduce ground rent on existing leases, and it does not make commonhold the default tenure.
Frequently asked questions
What is the Leasehold and Freehold Reform Act 2024?
The Leasehold and Freehold Reform Act 2024 (LAFRA) is a UK statute that received Royal Assent on 24 May 2024, in the final days before Parliament was dissolved for the 2024 general election. It amends the leasehold system in England and Wales, building on the Commonhold and Leasehold Reform Act 2002 and the Leasehold Reform, Housing and Urban Development Act 1993. LAFRA covers lease extension and enfranchisement, Right to Manage, service charge transparency, buildings insurance commissions, ground rent on new leases, and estate management charges for freehold homeowners on private/mixed estates. Crucially, LAFRA is an "enabling Act": many of its provisions require secondary legislation (statutory instruments) before they take legal effect, so they do not all apply automatically from Royal Assent.
Is the Leasehold and Freehold Reform Act 2024 fully in force?
No — this is the single most important point for leaseholders to understand. LAFRA received Royal Assent in May 2024, but most of its substantive provisions are commenced in stages via secondary legislation, and the pace has been set by the government of the day rather than by the Act itself. Some provisions (such as removing the two-year ownership requirement before a leaseholder can extend their lease or buy the freehold) were commenced first. Others — including the valuation rate changes for lease extension premiums, and elements of the ground rent reforms — depend on further consultation and regulations. Leaseholders and administrators should always check the current commencement status on legislation.gov.uk before assuming a specific provision already applies to their case.
What changed for lease extensions and enfranchisement?
LAFRA removes the requirement that a leaseholder must have owned their flat or house for at least two years before they can extend the lease or start a collective enfranchisement claim — this qualifying period was in force under the 1993 Act and has been repealed. LAFRA also standardises lease extension terms: a statutory lease extension now adds 990 years to both flats and houses (previously 90 years for flats, 50 years for houses), with ground rent reduced to a peppercorn (effectively zero) for the extended term. The Act also changes how "marriage value" is treated in premium calculations for longer leases, intended to reduce the cost leaseholders pay to extend — though the detailed valuation methodology depends on secondary legislation and has been the subject of ongoing legal challenge from freeholders.
What does LAFRA change for the Right to Manage (RTM)?
LAFRA raises the non-residential floor space limit for RTM eligibility from 25% to 50%, meaning buildings with more commercial space than before can now qualify for RTM. The Act also removes some restrictions that previously prevented certain leaseholders from participating in an RTM claim, and it introduces provisions allowing RTM companies to recover a wider share of costs from landlords in some circumstances. As with other parts of the Act, some of these RTM changes require commencement regulations, so leaseholders should verify current status rather than assume the widened 50% threshold already applies in their case.
What changed on service charges and transparency?
LAFRA introduces a standardised format for service charge demands and requires landlords/managing agents to provide leaseholders with more detailed, comparable information on request — including a breakdown of costs and, where relevant, the reasoning behind service charge increases. The Act also gives leaseholders a stronger right to challenge unreasonable service charges and legal costs at the First-tier Tribunal, and removes some barriers that previously discouraged leaseholders from bringing challenges (such as landlords automatically recovering their own litigation costs through the service charge). The detailed prescribed format for demands is set out in regulations that follow from the Act, rather than in the Act itself.
What changed for buildings insurance and ground rent?
LAFRA bans landlords, freeholders and managing agents from taking commissions on buildings insurance placed on a leasehold building, replacing commissions with transparent, disclosed handling fees. On ground rent, LAFRA does not retroactively reduce ground rent on existing leases to a peppercorn — that wider reform (originally proposed and then dropped from the Bill due to cost concerns for pension funds and freeholders holding ground rent portfolios) is not part of the Act as passed. What LAFRA does do is set ground rent to a peppercorn for the 990-year statutory lease extension term described above, and separately, the Leasehold Reform (Ground Rent) Act 2022 already restricts ground rent to a peppercorn on most new residential long leases granted since 30 June 2022.
Does LAFRA apply to commonhold or introduce new commonhold rules?
LAFRA includes some technical amendments affecting commonhold, but it does not replace leasehold with commonhold as the default tenure — that broader ambition (ending the sale of new leasehold flats and making commonhold the standard) was set out as a future government intention rather than delivered in this Act. Separate commonhold reform is expected to be addressed through further legislation. For now, commonhold remains a rarely-used alternative tenure in England and Wales, and the vast majority of flats continue to be sold as leasehold.
What should leaseholders and administrators do now?
Because LAFRA commences in stages, the practical advice is: (1) check the current commencement status of the specific provision relevant to your situation on legislation.gov.uk before relying on it; (2) if you are considering a lease extension or enfranchisement claim, get a professional valuation and legal advice, since premium calculation rules are among the areas still subject to secondary legislation and legal challenge; (3) keep records of service charge demands and insurance commission disclosures, since transparency obligations are being phased in and having a paper trail helps if a dispute arises later; (4) if you manage a building or several communities professionally, build a process to track which LAFRA provisions have commenced, rather than treating the Act as a single fixed rulebook. This is not legal advice — consult a solicitor specialising in leasehold enfranchisement for guidance on your specific case.
How can IgeraFincas help track leasehold reform compliance?
IgeraFincas lets administrators and RTM companies upload leases, service charge documentation and regulatory updates into a single knowledge base, so staff and leaseholders can ask questions and get answers that cite the exact source document or provision — instead of relying on memory or scattered PDFs. As LAFRA provisions come into force in stages, keeping the underlying documents current in the system means the answers stay aligned with what actually applies today, not an outdated summary. IgeraFincas is available from £99/month.
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