Old Law vs Leasehold and Freehold Reform Act 2024: Complete Comparison
The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024, amending the Leasehold Reform Act 1967 (for houses) and the Leasehold Reform, Housing and Urban Development Act 1993 (for flats). Because the valuation formulas require secondary regulations setting the statutory 'deferment rate' and 'capitalisation rate', the government has rolled out the Act in stages—beginning with the abolition of the 2-year ownership rule on 31 January 2025.
| Statutory Rule | Legacy Law (1967 & 1993 Acts) | Reformed Law (Leasehold & Freehold Reform Act 2024) | Implementation Status |
|---|---|---|---|
| Qualifying Ownership Period | Must own the property for 2 full years before serving notice | 0 Days — can serve notice immediately upon Land Registry registration | LIVE (Since 31 January 2025 via SI 2025/57) |
| Length of Statutory Extension (Flats) | +90 years added to unexpired term | +990 years added to unexpired term | Enacted in Section 30 (Awaiting valuation commencement) |
| Length of Statutory Extension (Houses) | +50 years added (at a modern ground rent) | +990 years added at a peppercorn (£0) ground rent | Enacted in Section 29 (Awaiting valuation commencement) |
| Marriage Value (<80 Years Left) | Pay 50% of marriage value to the freeholder | Abolished — £0 marriage value payable | Enacted in Schedule 4 (Subject to secondary rates & judicial review) |
| Ground Rent Cap in Premium Calculation | Full ground rent capitalised (including escalations) | Ground rent capped at 0.1% of the property's freehold value | Enacted in Schedule 4 (Awaiting valuation commencement) |
| Freeholder's Legal & Valuation Fees | Leaseholder must pay 100% of landlord's reasonable fees | Each party pays their own legal and valuation costs | Enacted in Section 37 (Awaiting valuation commencement) |
What Changed on 31 January 2025? (2-Year Ownership Rule Abolished)
Under The Leasehold and Freehold Reform Act 2024 (Commencement No. 2 and Transitional Provision) Regulations 2025 (SI 2025/57), Section 27 of the 2024 Act came into legal force on 31 January 2025.
Previously, if you bought a flat with a short lease, you either had to ask the seller to serve a Section 42 Notice before exchange of contracts and assign the benefit to you via deed, OR wait 2 full years after HM Land Registry completed your registration before you had the legal right to extend. Today, any registered leaseholder can serve a statutory lease extension notice immediately after registration—removing one of the biggest conveyancing delays in UK property transactions.
It depends on your remaining lease length. If your lease is sitting between 80.5 and 82 years, waiting could cause your lease to drop below 80 years if the valuation commencement is delayed by freeholder human rights litigation—so serving notice or seeking specialist RICS valuation advice before crossing 80.0 years is critical. Conversely, if your lease is already well below 80 years (e.g. 68 years) and you are not selling or remortgaging immediately, waiting for the abolition of marriage value to take effect can save £10,000 to £35,000+.
The 0.1% Ground Rent Cap in Lease Extension Calculations
Even on leases above 80 years (where marriage value is already £0), leaseholders with high or doubling ground rents previously faced huge extension premiums because the surveyor had to calculate the present value of all future ground rent payments over the remaining lease term.
Under Schedule 4 of the 2024 Act, when calculating the lease extension premium, any ground rent exceeding 0.1% of the flat's market value is ignored (capped at 0.1%). For example, on a £300,000 flat paying £600/year ground rent, the valuation formula will pretend the ground rent is capped at £300/year (0.1%), cutting the compensation paid to the freeholder in half.
Step-by-Step Lease Extension Preparation Checklist
Before instructing a solicitor to serve a statutory Section 42 Notice, complete these five checks: