Leasehold & Freehold Reform in the UK 2025 - What You Need to Know
- Mariam Ishola
- Nov 5
- 5 min read
Introduction
Big reform is coming. If you own a flat or leasehold property (or plan to), you might feel like leasehold has always worked against you with hidden service charges, expensive extensions, restrictive rights.
Now, in 2025, the UK government is pushing major changes on leasehold & freehold reform. Some parts are live, others are still being debated — and that gray area can be risky.
In this post, you’ll learn what’s already changed, what’s on the way, how it affects you, and what you should do now — in plain, simple language (no legalese).
What Is Leasehold vs Freehold?
Leasehold means you own the property (often a flat) for a set number of years (e.g. 80, 99, 125, etc.), but you do not own the land it's built on. You usually pay service charges, sometimes ground rent, and follow rules set by the freeholder or landlord.
Freehold means you own both the building and the land — full ownership (common for houses).
Many UK flats are leasehold; many houses are freehold.
Why it matters: Under leasehold, you may face expensive charges, short leases, and limited control. Reform aims to reduce those disadvantages.
What the 2024 Act Promised & Why It Matters
The Leasehold & Freehold Reform Act 2024 lays down the legal foundation for many changes.
Here are key promises:
Easier lease extensions & freehold purchases
The Act simplifies the process of extending your lease or buying the freehold under more favorable terms.
Abolish the “two-year rule”
Before, you had to wait two years after owning the property before applying to extend or buy the freehold. That rule was removed.
Right to Manage & management control
The Act expands who can take over management of their building (for example, in mixed-use estates) and reforms voting and cost rules.
Transparency & service charges reform
Reforms require clearer breakdowns of how service charges are set, insurance commissions, and giving leaseholders better ability to challenge unfair costs.
Ban or restrict new leases / change tenure type
The Act aims to block granting some new long residential leases, and to encourage commonhold (a shared ownership model) over leasehold.
These changes are important because they give leaseholders more rights and reduce the unfairness that many have long complained about.
What’s Already Happened in 2025
Some sections of the reform are already live. Knowing what is active helps you act without delay.
Abolition of the two-year waiting rule - January 31, 2025
From that date, you no longer have to wait two years after buying a leasehold to extend or purchase the freehold.
Right to Manage changes - March 3, 2025
More leaseholders (even in mixed-use buildings) can take over management. Also, many leaseholders will not have to pay freeholder legal costs in claims.
Consultations launched
On July 4, 2025, the government opened a wide consultation on how to implement parts of the Act, especially around service charges, managing agents, and costs.
Strengthening leaseholder protections
The government is consulting on adding protections over charges, services, legal costs, and how duties are performed by managing agents.
Pressure and legal challenges
Freeholder groups have launched legal action challenging aspects of the reform (like valuations, costs, and rights). The outcome of these challenges may delay parts of the law.
Government proposals to speed up property transactions
On Oct 6, 2025, the government announced new proposals to require sellers and estate agents to provide upfront property information (condition, leasehold costs, etc.) — tied to homebuying reforms overall.
What’s Still Waiting / Under Debate
Because the Act passed first, many changes depend on secondary legislation, regulations, and consultations. Also legal challenges could shift outcomes.
Setting valuation rates & premiums
The law has not yet defined the rates and formulas for the cost of a lease extension or freehold purchase. That detail is pending.
Implementation of service charge & legal cost rules
While reforms require transparency, the exact rules (how much, when, how disputes work) are being shaped.
Mandatory qualifications for managing agents
The government is consulting on whether property managers should need professional credentials.
Ban on new leasehold flats & push to commonhold
Though ideas to make commonhold default for new homes exist, the timeline and mechanisms are not finalized.
Possible delays from court challenges
Legal actions by freeholders may force changes or pauses in parts of the legislation.
Other reforms (major works, section 20, insurance, etc.)
Consultation includes reforms to how major repairs costs are charged (Section 20), how insurance commissions operate, and how disputes are resolved.
Leasehold & Freehold Reform in the UK 2025 - How These Reforms Affect You
Knowing theory is one thing. Here's how it matters to leaseholders, buyers, and homeowners.
Better rights & less waiting
You will no longer be blocked by a “two-year rule” before extending or buying your freehold.
More ability to challenge costs
Expect clearer breakdowns of charges. If you thought costs were unfair, you may have stronger grounds to dispute them.
More control over your building
If you live in a building with non-residential parts (shops etc.), you may now qualify for management rights.
Valuation risks
Because rates are not set yet, costs may vary — some may benefit, others might pay more if government sets valuations high.
Timing matters
Some reforms won’t come into effect until secondary rules are passed. Acting too early or too late could have different consequences.
Legal uncertainty
Court challenges may change or delay parts of the law.
Impact on buying/selling
On Oct 6, 2025, the government proposed requiring sellers to share upfront property condition and leasehold cost info. This could make transactions more transparent — and push poorly-disclosed leases into trouble.
What You Should Do Today — Your Simple Checklist
Here’s what you can do now (even before all laws fully kick in):
Check your lease terms & length
Know how many years you have left, what ground rent you pay, and any service charge history.
Request full service charge statements & breakdowns
Ask for past 5 years, and insist on details of insurance, major works, legal costs.
Find out whether your building includes mixed-use / non-residential parts
If yes, new rules may let leaseholders take over management.
Monitor government updates & consultations
Stay updated with the latest government announcements and outcomes of the consultations that ended on 26 September 2025.
Be cautious when buying
Ask upfront for lease documentation, condition reports, and check if the property is subject to reforms.
Consider legal or specialist advice
If you already own a leasehold or are negotiating one, a property lawyer or leasehold specialist can guide you.
Conclusion & Final Thoughts
Leasehold & freehold reform in 2025 is one of the most significant shifts in UK property law in decades. It promises greater fairness, transparency, and control for leaseholders — but it’s a complex transition period.
Some parts are already active (like removing the two-year waiting rule), others are still being shaped through consultations and legal challenges.
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