UK land and property: what is happening with freehold and leasehold reform?

For decades, owners of freeholds have fought to keep the legal architecture that governs multi-occupied blocks in England and Wales. Leaseholders have lived with the consequences: a time-limited right to occupy, service charges they cannot control, and the constant risk that the value of a flat will be eroded by the behaviour of a party who owns the ground beneath it. Momentum for reform has grown as those risks have become better understood and as the wider economy has struggled to grow under the weight of high housing and land costs.

In 2024 Parliament passed the Leasehold and Freehold Reform Act 2024. In July 2025 the High Court heard a judicial review brought by freeholder interests who say parts of the Act go too far. Whatever the outcome, one theme is clear. The direction of travel is away from opaque, extractive freehold control and toward models that give flat owners more say over management and costs.

This guide explains where leasehold came from, what the 2024 Act tries to do, why there is a court challenge, and what practical options leaseholders and prospective buyers have right now.

Why leasehold in England and Wales is different

England and Wales separate ownership of land from occupation of the homes that sit on it. The person with freehold title owns the land. A flat owner usually holds a leasehold that grants a right to occupy for a fixed term, commonly 99 or 125 years. That term runs down. As expiry approaches, the lease becomes a wasting asset and the flat’s value trends toward zero unless the lease is extended.

In many other countries, owners of flats also own a share of the building and its common parts. You will hear terms like condominium, strata title or co-operative. English law historically made it hard to impose positive obligations on successors in title, so the law defaulted to leases as the mechanism to fund and enforce maintenance and services across a block.

Two consequences have shaped today’s market:

1. Control and costs. Leaseholders pay for the building through service charges and major works, but freeholders or their agents typically control procurement and pace of repairs. The legal test for charges is that they are reasonable, which is often contested and does not automatically mean best value available.
2. Income streams for freeholders. Long leaseholds create multiple revenue lines: ground rent, permission fees, insurance commissions, lease extensions and the ultimate reversion when a lease expires. That is why developers historically preferred leasehold over commonhold. They can sell each flat once to the occupier and sell the freehold to an investor for a second capital receipt.

What the Leasehold and Freehold Reform Act 2024 is trying to fix

The 2024 Act is the latest attempt to rebalance the system. Key aims include:

• More power for occupiers over management. Leaseholders get stronger rights to choose and sack managing agents who do not act in occupiers’ interests, without needing to buy the freehold first.
• Simpler and cheaper pathways to take control. The Act builds on the right to manage and collective enfranchisement reforms by cutting technical traps and reducing landlord veto points that historically derailed leaseholder action.
• Ground rent clampdown continued. Parliament set most new residential ground rents to a peppercorn in 2022. The new Act pushes further to limit legacy ground rent exploitation that has impaired lending and resale.
• Fairer cost allocation and transparency. A package of measures targets opaque commissions and legal costs being loaded onto service charges. The default assumption that landlords can recover their litigation costs through the service charge is slated to end in most cases, subject to the final wording that survives the court challenge.

The government has also trailed longer term structural change, including a wider shift toward commonhold as the default for new flats, though widespread adoption needs developer incentives and lender comfort.

Why the 2024 Act is being challenged

Freeholders argue that elements of the Act unlawfully interfere with property rights and strip value from freeholds without fair compensation. They also say some parts are unworkable in practice. The High Court heard a judicial review in July 2025. At the time of writing, the court has not handed down a final decision. Until it does, much of the Act remains either in force or in the pipeline, but some provisions may be paused or later tweaked if the court requires changes.

What this means for you. Leaseholders can still use existing rights to manage, extend leases and collectively enfranchise. The new Act’s measures that are already commenced can be relied on, while others will come in through staged commencement orders. The challenge does not roll the clock back to the 1990s, but it may change specific levers and timelines.

The pressure points that drove reform

• Service charges and pace of repair. Leaseholders fund the building yet often have little say over who is hired to do works, the timing, or whether costs represent value for money. Disputes over reasonableness are common at the First-tier Tribunal, but case by case litigation is slow and expensive.
• Ground rent terms. Doubling ground rents every 10 or 15 years made some flats unmortgageable. That problem triggered the 2022 ground rent reforms and has fed into the 2024 package.
• Insurance commissions and opaque fees. Regulatory reviews since 2022 exposed significant commissions being paid to freeholders and managing agents and then passed to leaseholders through service charges. Transparency and fairness rules are tightening as a result.
• Cladding and building safety. After Grenfell, leaseholders found themselves billed for remediation on buildings they did not legally own. Recent safety legislation shifted much of that burden away from leaseholders, but the episode highlighted the structural mismatch between who pays and who controls.
• Market impact. Agents report that leasehold flat sales underperform houses and that values lag, widening the price gap. Buyer caution increases when service charges, lease length, and ground rent terms are unclear or unattractive.

Options leaseholders can use right now

You do not have to wait for every line of the 2024 Act to bite. These tools already exist and can be powerful if planned well.

1. Extend your lease
   A longer lease protects value and improves mortgageability. The sooner you extend, the cheaper it tends to be. Valuation and statutory timelines are technical, so get early advice.
2. Right to Manage (RTM)
   Qualifying leaseholders in a block can take over management from the freeholder’s agent without buying the freehold. This can deliver immediate control over costs and contractors.
3. Collective enfranchisement
   Leaseholders can club together to buy the freehold. The 1993 regime had traps and valuation disputes, but a well planned bid can align interests and unlock block-wide improvements. The 2024 Act aims to reduce friction points.
4. Challenge service charges
   If charges are not reasonably incurred or works are not of a reasonable standard, leaseholders can apply to the First-tier Tribunal. Evidence preparation matters. Keep minutes, quotes, and photos, and do not miss consultation steps under Section 20.
5. Commonhold on redevelopment
   Where major refurbishment or redevelopment is on the table, it can be worth modelling a switch to commonhold, especially for forward sales. Lenders are more open to commonhold where management is professional and documentation is robust.

Buying a leasehold flat in 2025: due diligence checklist

If you are purchasing, ask for these items up front and have them reviewed before exchange.

• Remaining lease term and premium to extend.
• Ground rent terms and any escalation.
• Service charge history, reserve fund balance, and planned major works.
• Evidence of Section 20 consultation for past or upcoming works.
• Building safety status and any remediation plans.
• Managing agent credentials and procurement processes.
• Any insurance commissions or broker arrangements that load costs.
• Whether there is an active RTM company or enfranchisement initiative.
• The building’s readiness for commonhold on future redevelopment.

How land law links to the wider economy

Land and housing costs influence productivity, infrastructure delivery, and foreign investment choices. If the law incentivises extraction over building and long term stewardship, you get under-investment, slower planning of major works, and a drag on growth. Reforming tenure and aligning control with those who pay can remove friction, lower transaction costs, and improve the supply of high quality urban housing. That is the economic case that sits behind the legal reform.

Practical scenarios and how we help

• Your service charge doubled with little notice
  We audit the charge, test reasonableness, check consultation compliance, and file a targeted First-tier Tribunal application if needed. We also advise on a parallel RTM strategy to prevent repeat issues.
• Your lease has 78 years remaining
  We run a valuation, open pre-action dialogue, and issue a statutory claim on a timetable that protects your sale or remortgage. If multiple flats are in the same position, we coordinate to reduce costs.
• Your block wants to replace the agent
  We compare three procurement routes, set service standards into the management agreement, and help the RTM company or freehold company run a clean tender.
• Developers and lenders seeking a clean exit
  We structure management and title so that buyers get clarity on costs and governance. Where suitable, we model commonhold to support off-plan sales.

Frequently asked questions

Is leasehold being abolished?
Not overnight. The 2024 Act strengthens leaseholder rights and management control. Government policy favours commonhold for new schemes in time, but adoption will be gradual and will depend on lenders and developers.

Can I stop paying ground rent now?
No. Ground rent on most new leases is already set to a peppercorn. Legacy ground rents still exist. The 2024 Act targets abuses, but you must follow the statutory process. Do not withhold payment without advice.

Will the High Court case undo the Act?
A judicial review can change or delay parts but it will not erase the entire statute. Expect clarifications and commencement in phases. We track each commencement order and will update clients as the court rules.

My freeholder passed their legal costs into the service charge. Is that still allowed?
Historically many leases allowed this. The 2024 Act is designed to restrict recovery of litigation costs through service charges in most situations. Until commencement is complete, the position is lease specific. We can review your wording and advise on strategy.

Is commonhold realistic for my block?
It depends on appetite, the building’s structure, and lender comfort. For blocks planning major works, moving to a company limited by guarantee that mirrors commonhold governance can be a stepping stone even before a legal conversion.

Key takeaways

• Leasehold separates control from cost. That mismatch is what the 2024 Act tries to correct.
• A court challenge is live. Expect refinement, not a full reversal.
• Leaseholders already have powerful tools: extend, manage, enfranchise, and challenge.
• Buyers must do deeper due diligence in 2025.
• Aligning control with those who pay is not only fair. It supports a healthier housing market and a stronger economy.

Talk to Parachute Law

Whether you are a leaseholder facing a service charge shock, a group exploring RTM or enfranchisement, or a developer planning a sales strategy that avoids legacy problems, we can help.

• Fixed fee reviews for leases, service charge packs, and Section 20 consultations
• RTM and collective enfranchisement from first meeting to completion
• Tribunal strategy and representation
• Developer and lender documentation built for clarity and saleability

Get a free initial consultation today. We will map your options, set timelines, and give you a clear cost plan before you commit.

Get expert legal advice today —Contact Parachute Law for a free initial consultation.

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