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Understanding the Impact of the New Leasehold and Freehold Reform Act on Homeowners


Hands protecting a house to show some looking after your home.

Homeowners will enjoy increased rights, power, and protections with the enactment of the Leasehold and Freehold Reform Act, now officially law. This landmark legislation simplifies and reduces the cost for leaseholders to purchase their freehold and extends lease terms to 990 years for both houses and flats. It also enhances transparency regarding service charges and removes obstacles for leaseholders to dispute unreasonable charges in the Tribunal.


Key provisions of the Act include:
  • Simplified Freehold Purchase and Lease Extension: It becomes more affordable and straightforward for leaseholders to extend their leases or buy their freehold, significantly reducing their costs. The standard lease extension term is increased to 990 years, offering leaseholders secure, long-term ownership.

  • Greater Transparency Over Service Charges: Freeholders and managing agents must now present service charge bills in a standardised format, making them easier to scrutinize and challenge.

  • Easier Property Management: The Act makes it simpler and cheaper for leaseholders to take over the management of their buildings and select their own managing agents.

  • Prohibition on New Leasehold Houses: The sale of new leasehold houses is banned, except in exceptional circumstances, ensuring new houses in England and Wales are freehold from the start.

  • Ban on Excessive Insurance Commissions: The Act bans opaque and excessive building insurance commissions, replacing them with transparent and fair handling fees.

  • Enhanced Redress and Transparency: Homeowners on private and mixed tenure estates are granted the same rights of redress as leaseholders. They will have equivalent transparency over estate charges and the ability to challenge their reasonableness.

  • Extended Access to Redress Schemes: Freeholders managing their buildings directly must now belong to a redress scheme, enabling leaseholders to challenge poor practices. This requirement already applies to managing agents.

  • Increased Commercial Space Limit for Management Rights: The limit on commercial space in buildings, which restricts leaseholders from taking over the management or buying the freehold, is raised from 25% to 50%, allowing more homeowners to access these rights.

  • Expedited Leasehold Transactions: The process of buying or selling a leasehold property is streamlined with new maximum times and fees for providing home buying and selling information.


The reform whilst collectively aiming to fortify consumer rights for homeowners, ensuring they face fewer financial and administrative burdens in securing their homes; also represents a significant step towards fairer, more transparent homeownership for leaseholders across England and Wales.


If you require help with extending your lease or with any of the key areas raised in this article, please contact Andrew Paul (Head of Conveyancing) by calling 02392 001551 or emailing: andrew.paul@wyethpaullaw.co.uk.

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