2025 will be crucial for leasehold reform as secondary legislation takes shape

Despite positive news regarding the Leasehold Reform Act, more work needs to be done in 2025, claims one firm.

The Association of Leasehold Enfranchisement Practitioners (ALEP) is calling on the government to end the uncertainty for more than five million leasehold flat owners in England.

The LLeasehold and Freehold Reform Act became law in May 2024, but more detail still needs to be determined through secondary legislation.

Huge uncertainty

The ALEP hosted a conference in the Autumn, where many attendees still felt a huge uncertainty surrounding the Leasehold and Freehold Reform Act.

With a further Draft Leasehold and Commonhold Reform Bill on the cards, there was considerable concern about how and when the law surrounding leasehold would change.

The level of uncertainty was evident in a live poll at the ALEP conference, in which participants were asked, “If you were advising the participants as of today, would you advise them to serve notice now or wait until the relevant parts of the Leasehold and Freehold Reform Act 2024 are in force?”

According to the poll, 36.73% said they would serve notice now, while a significant majority (63.27%) would wait until the relevant secondary legislation is brought in.

More detail still needed

Mark Chick, director of ALEP (Association of Leasehold Enfranchisement Practitioners) and a Partner at Bishop & Sewell LLP, said: “A year ago, the Leasehold and Freehold Reform Act was yet to have its First Reading in the House of Commons. By May 2024 it had been rushed onto the Statute Book, but with much detail still to be determined through secondary legislation.

“In November this year, we welcomed clarification, both of the implementation of some aspects of the legislation but also the acknowledgement by the government that there are specific and serious flaws within the legislation which must be resolved, such as amendments to the valuation mechanism, to the threshold for the Right to Manage (RTM) and to the 990-year lease extension in relation to shared ownership.”

Reforms to commonhold

Mr Chick adds leasehold reform will take time but hopes the government will stay committed.

He said:“It is encouraging that the Secretary of State seeks to follow through on the manifesto pledge to bring forward a draft Leasehold & Commonhold Reform Bill within this parliamentary session.  ALEP welcomes this news, along with the promise of a White Paper on reforms to commonhold in the early part of next year.

“The widespread introduction of commonhold will be complex, with a wide-ranging and extensive impact across the property market.  As such, it is correct that the government has not rushed into introducing commonhold in the early days of its administration.

“We see this announcement as a positive step forward. It may not yet go as far as some commentators might hope, but it shows an appreciation by the government that reform in this area is complex and will take time.

“Importantly, it puts in place a timeframe for reform which will be much welcomed by those – from individual leaseholders to professional advisers – who have been adversely affected by uncertainty for the past year.”

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