The latest on the implementation of leasehold reform (2025)

The Leasehold and Freehold Reform Act 2024 made the statute book in May 2024 during the “wash up” period shortly after the General Election was called. Plans by the Conservative government to cap ground rent and make commonhold the default tenure, as recommended by the Law Commission in 2020, did not make it into the legislation.

The Labour government committed in the briefing notes to the 2024 King’s Speech to “act quickly to provide homeowners with greater rights, powers and protections over their homes by implementing the provisions of the Leasehold and Freehold Reform Act 2024”.

The government published the Commonhold White Paper on 3 March 2025, to “reinvigorate commonhold and make it the default tenure” for new flats. They have also promised to “tackle” existing ground rent “by regulating ground rents for existing leaseholders so they no longer face unregulated and unaffordable costs”.

The government also published a detailed consultation on 4 July 2025 on their proposals to reform service charges and the “Section 20 major works” regime, as well as introducing minimum qualifications for managing agents.

This blog posts sets out the latest news on the various leasehold reforms.

>> Related Post: What will be in the draft Leasehold and Commonhold Reform Bill?

>> Related Post: Leasehold and Freehold Reform Act 2024 timeline for implementation

Last updated: 7 July 2025

When will the Leasehold and Freehold Reform Act 2024 come into force?

The previous government had indicated that the “majority of reforms” in the Leasehold and Freehold Reform Act would come into effect in 2025 or 2026. “anticipate that the majority of reforms will come into effect in 2025 or 2026”.

This is the latest news on what the Labour government intends to do, based on Matthew Pennycook’s Written Statement to the House of Commons on 21 November 2024, in which he referred to the Leasehold and Freehold Reform Act having “a small number of specific but serious flaws which would prevent certain provisions from operating as intended and that need to be rectified via primary legislation”.

1. Implementation of the “two year rule” on 31 January 2025

Section 27 of the Leasehold and Freehold Reform Act 2024 came into effect on 31 January 2025. It abolished the two year rule which required leaseholders to wait for two years after they purchase a property before they can extend their lease or buy their freehold.

This was done by means of the Leasehold and Freehold Reform Act 2024 (Commencement No 2 and Transitional Provision) Regulations 2025 (SI 2025/57).

Section 27 is the first significant provision in the Act to come into force.

From 31 January 2025, anyone who buys a lease will be able to buy the freehold or extend their lease straightaway.

• This was the first significant provision of the Act to come into force.
• Section 27 of the Leasehold and Freehold Reform Act 2024 abolished the two year rule which required leaseholders to wait for two years after they purchase a property before they can extend their lease or buy their freehold.
• The Leasehold and Freehold Reform Act 2024 (Commencement No 2 and Transitional Provision) Regulations 2025 (SI 2025/57) implemented Section 27 with effect from 31 January 2025.

2. Implementation of right to manage provisions

Section 49 (change of non-residential limit on right to manage claims) and Section 50 (costs of right to manage claims) in the Leasehold and Freehold Reform Act regarding came into effect on 3 March 2025.

According to the government, this includes “expanding access, reforming its costs and voting rights”. It also means that “more leaseholders in mixed-use buildings can take over management from their freeholders, and leaseholders making claims will, in most cases, no longer have to pay their freeholder’s costs”.

3. Consultation on service charges and legal costs commenced 4 July 2025

The government finally published a consultation paper on 4 July 2025 called Strengthening leaseholder protections over charges and services on their proposals to “increase transparency of service charges and building insurance policies, as well as tackling unjustified litigation costs”.

The consultation also contains proposals to require mandatory professional qualifications for letting agents and reform of the major works process, set out in Section 20 of the Landlord and Tenant Act 1985.

4. Consultation on enfranchisement premiums in summer 2025

The government will go out to consultation “next summer” on the “valuation rates used to calculate the cost of enfranchisement premiums”.

Primary legislation will be needed to approve the secondary legislation that sets out the detail, as well as fixing the Act’s serious flaws in further primary legislation, before implementing the package.

5. Consultation on “fleecehold” estate management charges in 2025

The government announced that they would consult in 2025 how to protect residential freeholders on private and mixed-tenure housing estates from “unfair charges”, to implement the Act’s new consumer protection provisions with a view to bringing these measures into force “as quickly as possible thereafter”.

Specifically, this would ensure that those who pay estate management charges would have “better access to information they need to understand what they are paying for, the right to challenge the reasonableness at the First-tier Tribunal (in England), and to go to the tribunal to appoint a substitute manager”.

Publication of draft Leasehold and Commonhold Reform Bill

Matthew Pennycook announced that a draft Leasehold and Commonhold Reform Bill would be published in the second half of 2025, after the publication of a White Paper which would “invite consultation and discussion about how we finally transition away from leasehold”. The White Paper was published on 3 March 2025.

The government launched a consultation on 4 July 2025 that included proposals for the reform of the major works procedure under Section 20 of the Landlord and Tenant Act 1985 where works are due to cost more than £250 per leaseholder.

The draft Leasehold and Commonhold Reform Bill is expected to include the following:

• A ban on new leasehold flats, although they will consult on “potential exemptions for legitimate use and how to minimise disruption to housing supply”.
• A limit on existing ground rents.
• The removal of forfeiture.

We also intend to act to protect leaseholders from abuse and poor service at the hands of unscrupulous managing agents. The previous government committed to regulate the property agent sector in 2018, even asking a working group chaired by the esteemed Lord Best to advise them how to do it. Yet, over multiple years it failed to take any action.

>> Related Post: What will be in the draft Leasehold and Commonhold Reform Bill?

The latest on the regulation of property agents

In his written statement of 21 November 2024, Matthew Pennycook said they were “looking again at Lord Best’s 2019 report on regulating the property agent sector”.

The consultation dated 4 July 2025 contained proposals to set minimum qualifications for managing agents to level 4 as standard, “with exceptions where the role has more or less responsibility”. The consultation asks for feedback on minimum continuing professional development (CPD) requirements.

The consultation does not mention the regulation of letting agents, although the focus of the consultation was on leasehold and specifically excluded letting agents and estate agents.