In a groundbreaking move expected to reshape the lives of leasehold property owners, last week Housing Minister Matthew Pennycook (pictured) announced the elimination of the two-year ownership rule for extending leases or buying freeholds.
This reform, effective later this month, is a significant first step in addressing the challenges that have long plagued leasehold property owners.
The announcement, which followed months of uncertainty since reforms were first proposed in May 2024, has been met with widespread relief.
The change means that owners of leasehold flats and houses no longer need to wait two years to initiate critical processes, allowing them to act immediately to secure their property rights.
GAME-CHANGER
Legal experts are already highlighting the practical benefits of this reform.
James Khakpour-Smith, Partner at Taylor Walton Solicitors, says: “This is good news for the owners of leasehold flats and houses, as many have been delaying their next move on the property ladder whilst they waited to see what would happen.
“Properties with shorter leases will now be easier to sell. Owners can begin extending their leases without delay, removing the need for complicated provisions during property sales.”
The removal of the waiting period could unlock the market for thousands of leasehold properties, many of which have struggled to attract buyers due to restrictive lease terms. By making lease extensions more accessible, the government hopes to restore confidence and mobility within the property market.
LOOMING CHALLENGES
However, while this development is a positive step forward, experts caution that broader leasehold reform remains incomplete.
Proposed legislation to make lease extensions quicker, cheaper, and less bureaucratic is still under consultation. Key issues such as high costs, legal complexities and administrative delays continue to hinder progress.
Khakpour-Smith further explains: “Leasehold property owners now face additional factors to consider, such as Stamp Duty Land Tax changes coming in April 2025, persistently high interest rates and the potential rise in property prices. These economic pressures mean that while the reforms offer hope, they do not resolve the wider challenges of property ownership.”
COMPREHENSIVE REFORM
Advocacy groups have called on the government to accelerate its efforts to overhaul the leasehold system entirely. Many leaseholders are still trapped in what has been described as a legal and financial “limbo,” facing excessive ground rents and onerous terms that make their properties difficult to sell or mortgage.
Pressure remains on policymakers to deliver the comprehensive changes promised. As consultations continue, property owners are left weighing their options: take advantage of newfound flexibility now or hold out for further reforms that may take years to materialise.
For many, the answer is clear. “People can’t keep life on hold,” Khakpour-Smith says. “This change offers immediate relief and greater certainty for buyers and sellers alike, marking an important step in freeing leaseholders from the constraints of an outdated system.”
As the reforms roll out, the housing market will be watching closely to see whether this is the beginning of a genuine transformation or just a small step in a much longer journey.
