Leasehold Reform Act 2024: Impact on BTL Leaseholders

You are in an awkward timing window. The Leasehold and Freehold Reform Act 2024 is law, but as of April 2026 a lot of the juicy stuff leaseholders talk about on forums is not fully in force yet.

Below is what actually matters for you as a BTL flat owner, and what is still just "coming soon".

1. What the 2024 Act is trying to do

Headline aims (England and Wales):

• Make lease extensions and collective enfranchisement cheaper and simpler.
• Push ground rents down towards peppercorn over time.
• Ban new leasehold houses in almost all cases.
• Give you better service charge transparency and more power to challenge costs.
• Make it easier to get control of your block (right to manage / buy the freehold).

The Act got Royal Assent in May 2024. The government then published an implementation roadmap in late 2024, with chunks of the Act being switched on via commencement regulations through 2025-27.

As at April 2026, you are in a mixed regime: old 1993 Act still doing most of the work, with some 2024 Act bits already live and others waiting on secondary legislation.

2. Key changes in the Act (on paper)

On paper, the 2024 Act promises:

Lease extensions

• Standard statutory lease extension term for flats and houses to increase to 990 years (up from 90 years for flats under the 1993 Act).
• Ground rent on a statutory extension set to peppercorn (zero financial value).
• Removal of the old 2-year ownership rule, so you can extend pretty much as soon as you own.
• Removal of marriage value from the premium calculation.

Ground rent reform

• New rights to vary leases to replace existing economic ground rent with a peppercorn in some situations.
• Separate proposals (outside this Act) to cap ground rent, generally talked about as limited to GBP 250 then tapering to peppercorn over 40 years, but this is at Bill/consultation stage, not fully enacted as of early 2026.

Service charge and management reforms

• Standardised, more transparent service charge and administration charge summaries.
• Requirement for landlords to publish certain admin charge schedules and more detail on insurance and major works.
• Removal of the default presumption that you pay the freeholder's legal costs when you challenge service charges, making FTT challenges less suicidal.
• Freeholders who manage themselves to join a redress scheme.

Right to manage / collective enfranchisement

• Raising the non-residential limit from 25% to 50%, so mixed-use blocks with more commercial space still qualify for RTM/collective enfranchisement.

New leasehold houses

• Ban on sale of almost all new leasehold houses, with limited exceptions (for example some shared ownership, community housing).

All of that is in the Act. The catch is commencement.

3. What is actually live as of April 2026

As of April 2026, you can rely on the following as implemented, based on 2025-26 commencement regulations and professional guidance:

Ban on most new leasehold houses

New houses must generally be sold as freehold, with narrow exceptions. Not a huge direct impact on flat landlords, but shows the direction of travel.

2-year ownership rule removed

From 31 January 2025, you no longer need to have owned your flat for 2 years before serving a statutory lease extension claim or joining a collective freehold purchase. This applies to existing leases, not just new ones.

Non-residential cap raised to 50%

Also in force from 31 January 2025: blocks with up to 50% commercial floorspace now qualify for collective enfranchisement / RTM (up from 25%). If you own in a mixed-use building, you now have a better shot at taking control.

Some building safety cost tweaks and redress measures

The Act amends bits of the Building Safety Act 2022, including cost recovery, remediation orders and contribution orders, which is relevant if your block has cladding or other safety defects.

First steps on service charge transparency

The Act itself contains duties to provide clearer, standardised service charge info and to scrap the presumption that you pay the landlord's litigation costs. Implementation is being taken forward through "strengthening leaseholder protections" consultations and secondary regulations, with some transparency obligations starting to phase in from 2025-26.

So there are real, actionable changes already, especially the 2-year rule and 50% non-res limit.

4. What is still pending (the bit forums gloss over)

Big items that are in the Act but NOT fully commenced as of April 2026:

990-year statutory lease extensions

The intention is 990 years instead of an extra 90 years, but government and multiple legal commentators are clear that these provisions require further commencement regulations and are not yet live across the board. As of early 2026, in many areas you are still actually extending under the old 1993 Act mechanics (90-year add-on) until the relevant sections are brought into force.

Abolition of marriage value in practice

The Act abolishes marriage value on paper, but the valuation regime changes (including how freeholders are compensated) need detailed regulations. Commentary from 2025 indicates this "will likely make the process easier" but "provisions are yet to come into force until 2025 at the earliest; the current 1993 Act provisions still apply". As of April 2026, you must assume you may still face marriage value on sub-80-year leases until your solicitor confirms the relevant parts are commenced for your case.

New ground rent valuation and caps

Provisions to cap or tweak ground rent assumptions when calculating premiums, and to standardise peppercorn outcomes, are again dependent on secondary legislation. Separately, the high-profile GBP 250 ground rent cap drifting to peppercorn over 40 years reported by the BBC in early 2026 comes from a draft Bill / further reform proposals, not something fully in force yet.

Full rollout of service charge templates and legal cost rules

The government's 2025 consultation on "strengthening leaseholder protections over charges and services" was about how to implement these bits. Expect phased implementation and some delay; do not assume you can automatically avoid the landlord's legal costs in every dispute until the specific regulations are in place.

Bottom line: a lot of the Act is framework waiting to be switched on. Do not make big financial decisions assuming 990 years and no marriage value until you have advice on what is actually commenced in your timeframe.

5. Impact on you as a BTL flat landlord

Lease extension economics

If and when the 990-year / marriage-value-free regime is fully live, that does three things for you:

• Lowers the premium for many lease extensions, especially just below 80 years.
• Gives a much longer lease term, which improves future saleability and remortgage options.
• Removes the need to "extend twice" in your lifetime.

In practical BTL terms:

• A cheaper extension = higher asset value and better exit price.
• Buyers and lenders prefer long leases with peppercorn ground rent, especially once ground rent caps harden.

Right now, the biggest live win is the removal of the 2-year ownership rule, which means you can buy a short lease and extend almost immediately via statutory route (once the right is fully available for your scenario), improving value quickly.

Service charges and control

Once the service charge transparency and legal cost rules are fully implemented:

• It becomes easier to see where money actually goes (insurance, managing agent fees, major works).
• You are better able to challenge "gold-plated" contracts or suspicious major works at the FTT without automatically underwriting the freeholder's legal bill.

Combined with the non-res limit moving to 50%, this makes RTM and collective enfranchisement more realistic on mixed-use blocks, which is where a lot of investment flats sit.

For you:

• That can mean lower medium-term costs and more say over when and how works happen.
• It can also make your block more attractive to future BTL buyers who value control.

6. Practical decisions: extend now or wait?

This is the key decision point for many of your flats.

You are balancing:

• Current law (1993 Act: 90-year extension, marriage value over 80 years, existing ground rent assumptions).
• Future law (990-year, no marriage value, peppercorn ground rent, but start date uncertain).

A simple decision framework:

When it often makes sense to extend now

• Lease under 75-78 years and you are within a few years of dropping below (or already below) 80 years.
• You plan to sell or remortgage in the next 2-3 years and buyers/lenders will punish a short lease hard.
• Your solicitor confirms that, in your area, the core 990-year / marriage-value changes are not yet in force and there is no firm start date.

Rationale: dropping deeper below 80 years under the current 1993 Act rules sharply increases premiums because of marriage value. The saving from "waiting for reforms" can easily be eaten by the extra cost of a shorter lease in the meantime and a worse sale price.

When it can be worth waiting or timing carefully

• Lease is comfortably over 85-90 years.
• No urgent remortgage or sale planned.
• Government has published a clearer commencement schedule for the 990-year / valuation reforms for the next year or two.

Rationale: there is no marriage value risk yet. Even on the old rules a 90-year top-up would push you into very long lease territory, but if you can wait for a 990-year peppercorn extension on a simpler valuation basis you may come out ahead.

Blended approach

For a portfolio:

• Extend the shortest, most strategic leases now (or as soon as your solicitor says the new rules meaningfully reduce cost for you).
• Let longer leases run towards the new regime and reassess when commencement dates are clearer.

Remember: the Act is not retroactive in a way that unwinds extensions you already did. A 90-year extension now is still more valuable than holding a 72-year lease waiting for ministers to get around to your bit of the Act.

7. Interaction with selling and remortgaging

When you add the cladding/BSA world on top, the decision gets more nuanced:

• If your flat is in a cladding-affected block with BSA protections and a messy EWS1 position, the Leasehold Act helps around who pays what, but it does not fix lender appetite overnight.

Extending a short lease in a problem block can still make sense if:

• You intend to hold through remediation and sell on the other side.
• You want to preserve as much value as possible for when mortgage lenders come back in.

For remortgaging:

• Lenders price in lease length and ground rent heavily.
• A shorter lease plus escalating ground rent plus cladding risk is a triple-whammy.
• Where you can get an extension onto a peppercorn (either under current law or as the Act is implemented), that is a big tick in a lender's affordability and security box.

You should be modelling deals now on:

• Value with current lease length and ground rent.
• Value and remortgage options post-extension.
• Probability that the new 990-year / valuation rules will be in force before the lease drops through key thresholds.

8. What you should do next in practice

For each leasehold BTL you own:

Get the basics on a sheet

• Remaining lease term.
• Ground rent amount and review pattern.
• Service charge level and any big works planned.
• Any cladding / Building Safety Act issues.

Ask your solicitor 3 targeted questions:

1. For this flat, as of April 2026, do I extend under the old 1993 Act or can we rely on any 2024 Act commencement for valuation/term.
2. How is marriage value treated today for this lease length.
3. Has the 990-year term and new valuation basis been commenced in a way that applies to my extension if I start now / in the next 6-12 months.

Prioritise

• Under 80 years or close to it and you want to sell/remortgage soon: bias towards extending sooner.
• 90+ years and no pressure: monitor implementation and possibly wait.

Watch for ground rent caps

Keep an eye on the separate ground rent cap legislation feeding through, because capping high ground rents will change premiums and lender views. The BBC's coverage of a GBP 250 cap tapering to peppercorn by about 40 years is a proposal with an expected start in the late 2020s, not something you can bank on yet.

Legislation tracker, budget coverage, new tools. Free, no spam.

Didn't find what you were looking for?