The Leasehold and Freehold Reform Act 2024 promised more fairness, transparency, and control for leaseholders. One year later, some reforms are already transforming the market — but a looming judicial review could change everything.
Key Changes being introduced
- Clearer Service Charges: Leaseholders will get itemised, transparent billing.
- Ban on New Leasehold Houses: New houses will be sold as freehold.
- Lease Extension Reforms: Leaseholders will be able to extend leases by 990 years and “Marriage value” will no longer be charged.
- Removal of the Two-Year Ownership Rule: Leaseholders can now immediately extend their lease or purchase the freehold – no need to wait two years post-purchase.
- Right to Manage (RTM) Expanded: Mixed-use buildings with up to 50% commercial can now qualify for Right to Manage.
- Building Insurance Reforms: Hidden commissions will be banned; leaseholders must be informed of any insurance fees or commissions.
- Faster Property Sales: Standard forms will speed up transactions.
- Better Access to Redress and Tribunals: Easier to use complaint services and access to property tribunals for leaseholders if they face unfair treatment.
The Legal Challenge Ahead
A Judicial Review took place in a 4-day hearing in July 2025 that could block or alter key parts of the Act – specifically:
- Ground rent caps
- Abolishment of marriage value
- Removal of freeholders’ rights to recover legal/valuation costs in enfranchisement and lease extension claims
Opponents, including major institutional investors, historic estates and charitable landowners representing around 390,000 leaseholds, argued these measures would impact their long-term income and breach property rights under Human Rights Act (A1P1).
What’s at Stake?
The Government’s own Impact Assessment estimates a £1.9 billion loss over 10 years due to the abolition of marriage value alone. Freeholders suggest their combined losses range between £289 million and £404 million. Therefore, the high financial stakes make the outcome of this judicial review pivotal – not just for leaseholders and freeholders, but for the future direction of UK housing policy.
What Next?
A judgement is expected in a matter of weeks. If the freeholders win or partially succeed, Parliament may need to introduce new primary legislation to continue with reforms which could delay the reforms by months or even years. If the Government wins, it can proceed with the secondary legislation programme outlined in November 2024, completing implementation of the Act in 2025/early 2026.
Final Thoughts
The weeks ahead will be crucial. Whether you’re a leaseholder, freeholder, property lawyer, or housing campaigner, the outcome of this legal challenge could redefine the property landscape for years to come.
If you need support or advice, please don’t hesitate to contact our Valuation team. We can guide you through lease extensions, enfranchisement, or understanding how the reforms may affect your property. We’re here to help you make informed decisions with confidence.
Author: Sian Edwards – Senior Associate Director – E: Sian.Edwards@argroup.co.uk / T: 01727 732216