The leasehold system has long been criticised for issues such as high ground rents, expensive lease extensions, short leases that make selling or remortgaging difficult, and poor property management.

The Leasehold and Freehold Reform Act 2024 introduced the biggest changes to leasehold law in years. While only some measures have taken effect so far, further reforms have been announced through a new Leasehold and Commonhold Reform Bill.

Here are the five key changes landlords should know about.

1. You can extend a lease or buy the freehold sooner

Since February 2025, leaseholders no longer have to wait two years after buying a property before applying to extend the lease or purchase the freehold.

For landlords buying properties with short leases, this could increase a property's value sooner and improve financing options by making previously unmortgageable properties mortgageable, reducing loan-to-value ratios or allowing equity to be released for further investment.

Keep in mind that you must first be registered as the owner with the Land Registry before making an application.

2. It's now easier to take control of property management

Changes introduced in March 2025 have made it easier for leaseholders to exercise the Right to Manage and take over the running of their building if management standards are poor.

Better management can help keep properties well maintained, improve tenant satisfaction and potentially support stronger rental values.

3. More reforms are on the way

The proposed Leasehold and Commonhold Reform Bill would:

• Ban leasehold for most new flats, making commonhold the default tenure.

• Cap existing ground rents at £250 per year before reducing them to a peppercorn (zero) after 40 years.

• Make it simpler and cheaper to extend leases or purchase freeholds.

These proposals are still progressing through Parliament, but if introduced they could reduce ownership costs and provide greater security for landlords investing in flats.

4. Further consultations have been completed

The government has also consulted on additional reforms covering:

• Fairer service charges and legal costs for freehold estates.

• Restrictions on excessive building insurance commissions.

• Stronger protections around service charges, insurance costs, litigation costs, major works consultation and regulation of managing agents.

The government's response is expected in due course.

5. More improvements are planned

Additional measures from the 2024 Act will be introduced over time, including:

• Increasing standard lease extensions to 990 years.

• Requiring freeholders who manage buildings directly to join a redress scheme.

• Introducing time limits for freeholders to provide information during property sales, helping reduce delays and lost rental income.

Together, these changes should make owning and managing leasehold investment properties simpler and more cost-effective.

Buying a leasehold property? Check these three things first

Before purchasing a leasehold investment property, ask your conveyancer to check:

1. The cost and terms of extending the lease if it has fewer than 100 years remaining.

2. Whether there is an adequate sinking fund for future major works.

3. Any lease restrictions on alterations, subletting or keeping pets.

The government has also published a leasehold reform toolkit explaining the changes in more detail and where to find further advice.

If you're looking to invest in a leasehold property or need support managing one you already own, get in touch with your local Leaders branch and speak to one of our lettings experts.

‍