2025 could be a significant year for leasehold property owners and prospective buyers. The Government’s Leasehold and Freehold Reform Act 2024 (LAFRA) — which received Royal Assent on 24 May 2024—is being implemented in phases, with key changes already in force as of 31 January 2025. These reforms are set to dramatically reshape how leasehold properties are bought, sold, and valued.
For estate agents and buyers, this is a major shift in the leasehold property landscape. Find out what’s changing, what it means for buyers and estate agents, and what we can expect from the property market in 2025 as a result of LAFRA.
Here’s a quick overview: What’s in Leasehold and Freehold Reform Act 2024?
The Act builds on the Government’s pledge to make leasehold ownership simpler, fairer, and more transparent. Key provisions include:
- 990-year lease extensions: Both flats and houses will now benefit from the right to extend their lease by 990 years (up from 90 years for flats and 50 years for houses).
- Abolition of the two-year ownership rule: As of 31 January 2025, leaseholders no longer need to wait two years after purchasing before they can extend their lease or buy the freehold. This is a live and enforceable change.
- Ban on marriage value: Although this measure hasn’t yet come into effect, it remains a proposed change to make lease extensions cheaper—especially for leases under 80 years.
- More transparent service charges and ground rent info: Leaseholders will gain enhanced rights to challenge unreasonable costs.
- Faster information disclosure: Freeholders will be required to provide key leasehold information within set timeframes, streamlining the conveyancing process.
Further implementation details—including those regarding marriage value and lease pricing reform—are still being consulted on. The Leasehold and Freehold Reform Act 2025 is expected to be the main vehicle for bringing remaining provisions into force.
What’s left to come in 2025?
Some of the changes from the Leasehold and Freehold Reform Act are still to be implemented. According to the timeline given, these are some key dates as to what we can expect and when:
Summer 2025 – Valuation reform consultation
The government is expected to launch a consultation in summer 2025 on how enfranchisement premiums (the cost of lease extensions and freehold purchases) are calculated. This includes reviewing the valuation rates used and considering ways to simplify and reduce costs for leaseholders. Before these changes can be implemented, Parliament will need to approve secondary legislation—and potentially pass new primary legislation to address some technical flaws in the current Act.
Later in 2025 – Strengthened consumer protections
The government also plans to consult on how best to implement the Act’s new consumer protections for homeowners on freehold estates. This may include clearer rules around estate management fees and the ability to challenge unfair charges. This will also include further work on improving transparency around service charges and limiting freeholders’ ability to recover legal costs from leaseholders in disputes. These measures are expected to be brought into force as soon as possible after the consultation concludes.
In short, while 2024 and early 2025 have already seen major progress, the leasehold landscape will continue evolving over the next 12–18 months. Agents, buyers, and leaseholders alike should keep an eye on the next phase of reform.
What does this mean for the property market in 2025?
The implementation of LAFRA is beginning to reshape the leasehold property landscape. Here’s how the market is responding (or what we can expect to see as a result):
1. Short leases are becoming more manageable
With the abolition of the two-year ownership rule effective from 31 January 2025, buyers can now initiate lease extensions or freehold purchases immediately upon acquiring a property. This change reduces the risks associated with short leases, making such properties more attractive to buyers and potentially increasing their marketability.
2. Enhanced flexibility for buyers
The immediate eligibility to extend leases or purchase freeholds provides buyers, especially first-time homeowners, with greater control over their property investments from the outset. This flexibility can be a significant advantage in planning long-term property ownership strategies.
3. Anticipated financial reforms on the horizon
While the removal of marriage value from lease extension calculations is a key feature of LAFRA, it has not yet been enacted. The government plans to consult on the valuation rates used to calculate enfranchisement premiums in summer 2025, with secondary legislation required to implement these changes. Buyers should stay informed about these developments, as they could significantly impact the cost of lease extensions in the future.
4. Prospective improvements in conveyancing processes
LAFRA includes provisions aimed at expediting the conveyancing process by mandating quicker disclosure of leasehold information. Although these measures are not yet in force, their future implementation is expected to streamline transactions and reduce delays.
What the Leasehold and Freehold Reform Act means for buyers
If you’re considering purchasing a leasehold property, here’s some of the important things to consider that might be different to pre-LAFRA.
Understand the lease length and its implications
Leases with more than 90 years remaining are generally considered secure. However, leases approaching or below 80 years can incur additional costs and complications. It’s crucial to ascertain the exact lease length early in the buying process.
Approach short leases strategically
The ability to extend leases immediately after purchase opens opportunities to negotiate better purchase prices for properties with shorter leases. However, until the marriage value reform is enacted, extending a lease with less than 80 years remaining may still involve significant costs. Consult with a surveyor to understand the financial implications under both current and forthcoming regulations.
Stay informed on reform timelines
While some provisions of LAFRA are already in effect, others, like the removal of marriage value, are pending further consultation and legislation. Keep abreast of these developments to make informed decisions about the timing of your purchase and any lease extensions.
Seek professional advice
Engage with professionals experienced in leasehold properties, including solicitors and surveyors, to navigate the complexities of lease extensions and understand the potential impact of ongoing reforms on your investment.
Ask critical questions early
When evaluating a leasehold property, inquire about:
- The current lease length
- Ground rent and service charge amounts
- Any recent or planned major works
- Whether a lease extension has been initiated
- The responsiveness and cooperation of the freeholder
These questions can help identify potential issues and inform your purchasing decision.
What the Leasehold and Freehold Reform Act means for estate agents
LAFRA’s reforms have significant implications for estate agents, affecting property valuations, marketing strategies, and client advisement:
Increased appeal of short lease properties
The removal of the two-year ownership requirement allows agents to market short lease properties more effectively, highlighting the immediate opportunity for buyers to extend leases and potentially add value.
Greater emphasis on lease details
Buyers are becoming more vigilant regarding lease terms. Providing comprehensive information on lease length, ground rent, service charges, and any restrictions upfront can enhance transparency and build trust with potential buyers.
Anticipated changes in property valuations
Pending reforms, such as the abolition of marriage value, may alter the financial dynamics of lease extensions, impacting property valuations. Agents should stay informed about these changes to advise clients accurately and adjust marketing strategies accordingly.
Need for specialised knowledge
As the leasehold landscape evolves, agents equipped with up-to-date knowledge of legislative changes can provide valuable guidance to clients, positioning themselves as trusted advisors in the property market.
Why surveys are just as important
One thing that hasn’t changed—and won’t—is the importance of getting a professional survey.
While most people think surveys are just about the physical condition of the property, they’re even more crucial when buying leasehold. A good surveyor can:
- Spot structural or maintenance issues the freeholder should be managing (but might not be).
- Highlight building problems that could lead to future service charges or major works bills.
- Advise on leasehold-specific red flags—like cladding concerns, unusual restrictions, or costly ground rent terms.
Pair that with a solid understanding of the lease length, service charges, and upcoming reforms, and you’re no longer just buying a property—you’re making an informed investment.
Whether you’re buying your first flat, moving up the ladder, or just want peace of mind, a survey is one of the most valuable steps you can take. And if you’re not sure where to start, or you’ve already found a property and want a fast turnaround, our team is here to help.
