The Government’s much-anticipated Leasehold and Freehold Reform Bill is expected to become law by the end of 2025. For London flat owners, investors, and buyers, it marks the most substantial shift in residential property law in a generation.
This guide outlines the key legislative changes, their implications for the London leasehold market, and what you should be doing now.
Why This Matters in London
Leasehold is the dominant tenure for flats in London – spanning Victorian conversions, mansion blocks, and nearly all new-build developments. But the current system has long faced criticism for:
- Unpredictable ground rent increases
- Expensive, opaque lease extension processes
- Limited rights over building management
- Poor transparency on service charges
The Leasehold Reform Bill aims to modernise and rebalance this structure to empower leaseholders with greater value, fairness, and control.
What the Leasehold Reform Bill Introduces
You can follow the full bill’s progress here on Parliament’s official site.
1. Ban on New Leasehold Houses
All newly built houses in England and Wales must now be sold as freehold. This change won’t apply to flats yet – but future reforms are likely.
2. 990-Year Lease Extensions with Zero Ground Rent
Leaseholders will be entitled to extend leases to 990 years (up from 90) with ground rent reduced to a peppercorn. Read GOV.UK’s leasehold guidance.
3. Reduced Costs for Lease Extensions and Enfranchisement
A simplified statutory valuation process will lower costs for leaseholders looking to extend or purchase the freehold. “Marriage value” (a cost applied when leases fall below 80 years) will be abolished.
4. Transparent Service Charges and Tribunal Support
Freeholders and managing agents must provide standardised, itemised service charge statements annually. Leaseholders will have stronger rights to challenge fees via the First-tier Tribunal (Property Chamber)
What This Means for You
If You’re a Current Leaseholder
If your lease is under 80 years, it may be financially beneficial to wait until the reforms become law. The removal of marriage value alone could save tens of thousands in central London postcodes.
If You’re Buying a Flat
Short leases may become more appealing as extension rules improve. But legacy ground rent and service charge clauses will still need scrutiny – always instruct a solicitor to review lease terms carefully.
If You’re Selling or Investing
Vendors may choose to delay lease extensions to benefit from lower premiums later. In areas like Islington, Camden, Westminster, and Kensington & Chelsea, this could materially affect strategy and pricing.
What You Should Do Now
Review your lease length, ground rent terms, and service charge structure
If under 85 years, seek early advice on whether to extend now or wait
Plan ahead if considering collective enfranchisement or a Right to Manage claim
Monitor official updates on GOV.UK’s Leasehold Reform Hub
Get a Lease Extension or Sale Valuation
If you’re thinking about extending your lease or preparing to sell, a professional valuation is essential – particularly with upcoming legal changes.
Get your free expert valuation here
Speak to a Leasehold Expert
At Ernest Brooks International, we specialise in navigating complex leasehold matters, including lease extensions, collective enfranchisement, and strategic selling advice.
Talk to us about:
- Lease extension cost projections under the 2025 bill
- Whether to act now or wait post-reform
- Navigating disputes, RTM claims or freehold purchases
