What’s next for existing leaseholders? A realistic look at upcoming leasehold reform

For years, much of the debate around leasehold reform has centred on future buyers or on stopping developers from creating new leasehold properties. If you already own a leasehold home, it has often felt as though you were observing change from the sidelines. But 2025 brought a shift: several reforms came into force that directly benefit existing leaseholders, and more are progressing through the system.

Real progress — finally — for existing leaseholders

The Leasehold and Freehold Reform Act 2024 (LAFRA) has begun to bring about practical improvements. One of the most significant is the abolition of the old “two-year rule.” Previously, a leaseholder had to wait two years before they could apply to extend their lease or purchase the freehold. That delay has now been removed, allowing you to act from day one of ownership. It’s a small change on paper, but a very real difference for anyone who has just moved into a leasehold home and seeks greater security.

Lease extensions are now considerably more generous. Instead of the previous 90-year extension for flats or 50 years for houses, the standard term has been dramatically increased to 990 years. In practical terms, this provides long-term stability: extend once, and you will never have to think about it again.

Another meaningful improvement is aimed at leaseholders who want control over their building’s management. The Right to Manage (RTM) process has been opened up to more buildings, especially those with a mix of residential and commercial units. Until recently, many mixed-use buildings were excluded because of strict limits on the amount of commercial space allowed. Those barriers have now been relaxed, meaning more groups of leaseholders have the chance to take over day-to-day management.

There are also cost savings, as leaseholders are no longer required to pay the freeholder’s non-litigation legal fees when making an RTM claim — a change that removes a longstanding deterrent.

Additionally, the new rules limit how much influence freeholders can have within RTM companies. In the past, landlords could accumulate substantial voting power — sometimes enough to take control of the RTM company altogether. Under the updated system, a landlord’s voting rights are capped at one-third of the total, ensuring they can no longer dominate the management structure.

See also: Leaseholders’ Right to Manage: new changes

What’s still uncertain — and why it matters

While these developments are very welcome, some of the most significant changes are still pending. One of the most closely watched areas is the valuation process for lease extensions and freehold purchases. The government has said it wants to simplify the system and potentially remove “marriage value,” a cost that has made extending short leases particularly costly. However, the final form of the new valuation rules — and when they will be implemented — remains uncertain.

Another area where leaseholders still await clarity concerns service charges and the transparency of managing agents. LAFRA commits to improving accountability, reducing hidden charges and tackling excessive insurance commissions, but detailed regulations are yet to be published. For many homeowners, these reforms could make the most significant difference to daily costs, making the current uncertainty frustrating.

And although the Leasehold Reform (Ground Rent) Act 2022 ended ground rents for most new residential leasehold properties, most existing leaseholders continue to live with terms set years ago — some fair, others less so. Comprehensive solutions for older leases have not yet been guaranteed.

“Thank you so much Siobhan. You have been amazing throughout and your responsiveness and commercial approach were much appreciated.”

What this means for you

As an existing leaseholder, 2025 marked a genuine turning point. You can now act more quickly and with fewer hurdles to secure your investment, whether that means extending your lease, buying your freehold or taking more control over your building’s management. At the same time, many of the most eagerly anticipated changes — particularly around valuations and service-charge fairness — are still work in progress.

For now, the best approach is to stay informed. If you were previously waiting until your second anniversary to take action, you no longer need to. If you live in a mixed-use building, you might find that RTM is now a realistic possibility. As more details emerge, additional opportunities could arise.

Although progress might still appear glacial, the reforms introduced over the past year are the most significant improvements for leaseholders in decades, and further measures could profoundly transform leasehold ownership for the better.