A Professional Commentary by RES Property Surveyors Limited | June 2026

The Leasehold and Freehold Reform Act 2024 (LFRA 2024) represents the most significant overhaul of residential leasehold legislation in a generation. However, while the Act received Royal Assent on 24 May 2024, the majority of its most impactful provisions — including the abolition of marriage value, 990-year lease extensions, and new valuation rates — remain unimplemented as at June 2026. This guide sets out clearly what is now in force, what remains pending, and what leaseholders, freeholders, and property professionals should expect next.

Background: The Leasehold and Freehold Reform Act 2024

The LFRA 2024 was enacted with the aim of creating a fairer and more secure system of home ownership in England and Wales. Its headline objectives include making lease extensions and freehold purchases cheaper and easier, increasing service charge transparency, and extending leaseholders’ access to redress schemes. Despite these ambitions, implementation has proceeded in stages — and more slowly than originally anticipated. The government has conceded that full implementation will take “years not months”, with the most complex provisions dependent on further consultation and additional primary legislation.

What Has Already Come Into Force

1. Abolition of the Two-Year Ownership Requirement (February 2025)

From 31 January 2025, leaseholders of flats and houses can exercise their statutory right to extend their lease or purchase the freehold immediately upon completion of their purchase, without having to wait two years. Previously, this two-year qualifying period acted as a significant barrier — particularly for purchasers of short-lease property. This is the most immediately practical reform to have come into force and removes a historic structural advantage that worked in favour of freeholders. In practice, leaseholders will still need to wait for the Land Registry to register their ownership before serving a statutory notice.

2. Right to Manage: Extended to Mixed-Use Buildings (March 2025)

From March 2025, the threshold for non-residential floor area in mixed-use buildings that can be managed by leaseholders under the Right to Manage has been increased from 25% to 50%. This significantly extends the pool of qualifying buildings and enables more leaseholders in commercial/residential mixed buildings to take control of management arrangements.

3. Litigation Costs: Leaseholders No Longer Fund Freeholder’s Legal Fees

Under the reformed rules now in force, leaseholders bringing Right to Manage claims are no longer required to meet the freeholder’s legal costs. More broadly, the LFRA 2024 introduces a new regime under which each party bears its own legal costs in lease extension and collective enfranchisement claims — replacing the previous system under which leaseholders routinely bore the landlord’s reasonable legal and valuation costs. This change materially reduces the financial deterrent to exercising statutory rights.

4. Long Leases and Assured Tenancy Status (December 2025)

From 27 December 2025, long leases with a term exceeding 21 years no longer qualify as assured tenancies, irrespective of the level of ground rent. This resolves a long-standing problem whereby certain leaseholders with high ground rents risked being classified as assured tenants — with adverse consequences for mortgage finance and property sales. The change makes it easier for leaseholders to obtain mortgages and sell their properties.

What Has Not Yet Come Into Force — The Key Reforms

1. Abolition of Marriage Value

This is the most significant valuation reform in the Act for practitioners and leaseholders. Under the current law (Leasehold Reform, Housing and Urban Development Act 1993 and Leasehold Reform Act 1967), where a lease has fewer than 80 years unexpired, the premium payable on extension or enfranchisement includes a share of the marriage value — the uplift in value arising from the merger of the leasehold and freehold interests. The LFRA 2024 abolishes marriage value entirely, which for short-lease properties could result in very substantial savings in premium.

However, this provision is not yet operative. The government must first:

• Consult on the replacement deferment rates and capitalisation rates to be prescribed in secondary legislation
• Fix identified technical flaws in the LFRA 2024 itself through further primary legislation
• Await the outcome of the Court of Appeal challenge brought by freeholder groups (due to be heard in early June 2026)

Practitioners should note that until commencement, existing Tribunal rates and case law precedents on deferment and capitalisation rates continue to apply in full. Current market practice and Red Book valuations must be conducted under the existing 1993/1967 Act framework.

2. 990-Year Lease Extensions at Zero Ground Rent

The LFRA 2024 will, when commenced, extend the statutory term for flat lease extensions from 90 years (under the 1993 Act) to 990 years, at a peppercorn ground rent. This removes the need for repeated renewals and eliminates the ground rent payable under current statutory extensions. It has not yet come into force and remains contingent on the same secondary legislation and technical fixes required for the marriage value provisions.

3. New Prescribed Valuation Rates

The LFRA 2024 provides for government-prescribed deferment and capitalisation rates to replace the current approach of expert negotiation and Tribunal determination. The consultation on these rates — originally planned for Summer 2025 — was delayed by the freeholder judicial review proceedings. Following the High Court’s dismissal of those claims in October 2025, the government indicated it expected to consult in 2026, but implementation remains some way off. One of the key rates at issue is the deferment rate: the rate at which the value of the freeholder’s reversionary interest is discounted back to a present value. Under current practice, Tribunal decisions such as Sportelli [2007] set key benchmarks. These may be substantially altered by the new regime.

4. Collective Enfranchisement: Expanded Qualifying Criteria

The LFRA 2024 broadens the qualifying criteria for collective enfranchisement (the right of flat leaseholders collectively to purchase the freehold of their building). The non-residential floor area threshold is increased from 25% to 50%, matching the Right to Manage change already in force. This provision, once commenced, will allow more mixed-use buildings to qualify. The valuation methodology for collective enfranchisement is subject to the same pending regulations as individual lease extensions.

The Judicial Review — A Significant Complication

In January 2025, a group of freeholders — including interests associated with the Duke of Westminster and the Earl of Cadogan — were granted permission to seek judicial review of the LFRA 2024, challenging the abolition of marriage value and the restrictions on freeholders recovering legal costs. The High Court dismissed those claims on 24 October 2025, finding that whilst the reforms interfered with freeholders’ property rights, there was “robust justification” for each measure and that a “fair and proportionate balance” had been struck. However, five groups of freeholders were granted permission to appeal, and the Court of Appeal hearing is due in early June 2026. Any successful appeal could require further primary legislation and materially delay implementation of the valuation reforms.

The Draft Commonhold and Leasehold Reform Bill (2026)

The King’s Speech in May 2026 announced the introduction of a Commonhold and Leasehold Reform Bill in the 2026–27 parliamentary session. The draft Bill was published in January 2026 and is presently undergoing pre-legislative scrutiny by the Housing, Communities and Local Government Committee. Key proposals in the draft Bill include:

• Capping ground rents at £250 per annum before transitioning to a peppercorn after 40 years
• Banning new leasehold flats (consultation on implementation closed April 2026)
• Creating a comprehensive new legal framework for commonhold tenure — making commonhold the default for new flats
• Amending the technical flaws in the LFRA 2024 that currently prevent the enfranchisement and lease extension provisions from being “switched on”
• Repealing enforcement powers applying to estate rent charges on privately managed freehold estates

Commonhold was introduced in England and Wales under the Commonhold and Leasehold Reform Act 2002, but has seen minimal take-up — only around 20 commonhold developments have been recorded to date, largely due to complex conversion processes, lender unfamiliarity, and the absence of an incentive structure. The draft Bill aims to simplify conversion and make commonhold the viable default.

Practical Commentary: Implications for Leaseholders and Valuers

Current Law Remains in Force for Valuations

As at June 2026, all Red Book valuations for lease extension premium and enfranchisement price calculations must be conducted under the existing statutory framework — namely the Leasehold Reform, Housing and Urban Development Act 1993 (for flats) and the Leasehold Reform Act 1967 (for houses). Marriage value remains payable where the unexpired term is below 80 years. The established Tribunal benchmarks for deferment and capitalisation rates continue to apply. Surveyors and valuers should ensure that expert witness reports, Red Book valuations, and solicitor-facing advice clearly reflect the current operative law rather than anticipated reforms.

Should Leaseholders Act Now or Wait?

This is the key practical question facing many leaseholders. The answer is nuanced and depends on the specific facts of each case. Where a lease has more than 80 years remaining, marriage value does not arise under current law and the benefit of waiting for the new regime is less clear-cut — particularly given the uncertainty of timing. Where a lease is approaching or already below 80 years, the eventual abolition of marriage value could produce material savings, but the implementation timeline remains highly uncertain and is unlikely to be before late 2026 at the earliest, with many practitioners suggesting 2027–2028 as more realistic. Leaseholders should take specific professional advice, having regard to the remaining term, the extent of marriage value in the current calculation, and their personal circumstances.

Timeline Summary

• May 2024: Leasehold and Freehold Reform Act 2024 receives Royal Assent
• January/February 2025: Two-year ownership requirement removed; leaseholders can act immediately on purchase
• March 2025: Right to Manage extended to buildings with up to 50% non-residential space
• December 2025: Long leases over 21 years removed from assured tenancy definition
• October 2025: High Court dismisses freeholder judicial review — reforms upheld
• January 2026: Draft Commonhold and Leasehold Reform Bill published; ground rent cap proposals announced
• May 2026: King’s Speech confirms introduction of Commonhold and Leasehold Reform Bill in 2026–27 session
• June 2026: Court of Appeal hearing on freeholder appeal; valuation consultation still pending
• Late 2026 onwards: Consultation on prescribed deferment/capitalisation rates expected — secondary legislation to follow
• 2027–2028 (estimated): Earliest realistic commencement of marriage value abolition and new valuation regime

RES Property Surveyors Limited | 3 Waterhouse Square, 138 Holborn, London EC1N 2SW

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This commentary is provided for general information purposes only and does not constitute legal or valuation advice. Leaseholders and freeholders should obtain specific professional advice tailored to their circumstances. Law and practice correct as at June 2026.