Ground Rent Reform: The Leasehold and Freehold Reform Act 2024 Explained
The Leasehold and Freehold Reform Act 2024 (LFRA 2024) received Royal Assent on 24 May 2024. It is the most substantial overhaul of leasehold law since the Commonhold and Leasehold Reform Act 2002, and it builds on the earlier Leasehold Reform (Ground Rent) Act 2022, which abolished ground rent for new residential leases.
But there's an important caveat: much of the 2024 Act requires secondary legislation (statutory instruments and regulations) before it takes effect. As of mid-2026, not all provisions have been commenced. This guide explains what is already law, what is coming, and what existing leaseholders need to know about ground rent reform right now.
Background: What Is Ground Rent?
Ground rent is an annual payment leaseholders make to the freeholder simply for the right to hold the lease — it is not a payment for services, repairs, or management. In modern leasehold law, it has no logical purpose: it is a source of income for freeholders with no corresponding benefit to leaseholders.
Historically, ground rents were nominal — a few pounds a year. From the 1990s onwards, developers began granting leases with:
- Ground rents of £200–£500 per year
- Doubling clauses — ground rent doubles every 10 or 25 years
- RPI-linked increases — ground rent rises with inflation
The result: leaseholders in properties built in the 2000s and 2010s found themselves with ground rents escalating to £1,000, £2,000, or more per year — making their properties difficult to mortgage and sell. For a detailed breakdown of the doubling ground rent problem and what existing leaseholders with escalating clauses can do right now, see our ground rent reform UK guide for leaseholders.
The Leasehold Reform (Ground Rent) Act 2022 — What It Did
The Leasehold Reform (Ground Rent) Act 2022 (LRGRA 2022) came into force on 30 June 2022 for new residential long leases (and 1 April 2023 for retirement housing leases). It prohibits freeholders from charging more than a peppercorn ground rent (effectively zero) on new residential long leases.
Key provisions:
- New residential long leases granted after 30 June 2022 must have a peppercorn ground rent throughout the term
- Prohibited rent — any ground rent above a peppercorn on a regulated lease is a prohibited rent. Charging it is a civil offence with fines of up to £30,000 per offence
- Existing leases are not covered — the 2022 Act only applies to new leases. Leaseholders with existing doubling or RPI-linked ground rents are not protected by the 2022 Act
Key takeaway: If you bought a leasehold property before June 2022 and have a doubling or escalating ground rent clause, the 2022 Act does not help you directly. Your options are lease extension (which replaces the ground rent with a peppercorn) or waiting for the 2024 Act's further provisions.
The Leasehold and Freehold Reform Act 2024: What It Changes
The LFRA 2024 is a wide-ranging reform statute covering six main areas:
1. Lease Extensions — Longer Terms
The Act gives leaseholders the right to extend their lease to a 990-year term (up from 90 years under the Leasehold Reform, Housing and Urban Development Act 1993). The statutory right applies to both:
- Lease extensions under the individual right (Section 42 process, LTA 1993 as amended)
- Collective enfranchisement (freehold purchase by the building's leaseholders)
This is significant: a 990-year extension gives effective freehold security of tenure. Future owners will not face the 80-year cliff (below which marriage value becomes payable) for centuries.
Commencement: This provision requires commencement regulations — not yet in force as of June 2026. Check DLUHC guidance for implementation dates.
2. Marriage Value Abolished
Under the 1993 Act, leaseholders extending a lease below 80 years remaining must pay marriage value — 50% of the increase in property value attributed to the lease extension. For a flat in London with 60 years remaining, this can add tens of thousands of pounds to the lease extension premium.
The LFRA 2024 abolishes marriage value entirely. This is one of the most financially significant changes for existing leaseholders.
Commencement: Requires secondary legislation. When commenced, it applies to lease extension premiums calculated after the commencement date.
3. New Valuation Scheme for Premiums
The Act introduces a new prescribed rates system for calculating lease extension and freehold acquisition premiums. Currently, premiums are negotiated based on complex actuarial calculations (deferment rate, capitalisation rate) that vary by case and generate substantial professional fees.
The government will prescribe standard rates by statutory instrument, simplifying the calculation and — the government expects — reducing costs for leaseholders.
Commencement: Requires secondary legislation specifying the prescribed rates.
4. Service Charge Reforms
The LFRA 2024 gives the Secretary of State powers to introduce standardised service charge formats and restrict insurance commissions — changes that will significantly improve transparency for flat owners. For a full guide to the current rules on service charges, what counts as reasonable, and how to challenge excessive charges through the First-tier Tribunal, see our complete guide to service charges in leasehold flats.
The government has consulted on prescribed service charge account formats. Expect draft regulations during 2025–2026.
5. Right to Manage — Easier to Exercise
The Act makes RTM easier by:
- Removing the requirement to pay the freeholder's reasonable costs in connection with an RTM claim — a significant financial barrier under the current CLRA 2002 framework
- Allowing RTM for buildings where up to 50% of the building is non-residential (up from 25% under CLRA 2002)
For a full step-by-step guide to the current RTM process — including qualifying conditions, how to form an RTM company, and when collective enfranchisement is the stronger play — see our Right to Manage guide for leaseholders.
Commencement: Requires secondary legislation.
6. Building Manager Regulations
The Act enables the government to introduce a licensing scheme for property managing agents, requiring managing agents to hold qualifications and meet conduct standards. This would address the significant quality variation in the sector.
What Is NOT Changed by the 2024 Act
The LFRA 2024 does not cap or abolish ground rent on existing leases granted before 30 June 2022. This is the most commonly misunderstood point.
Leaseholders with onerous existing ground rents must still:
- Extend their lease (replacing ground rent with peppercorn) via the statutory process
- Negotiate a deed of variation with the freeholder
- Accept the ground rent as it stands
The government consulted on capping existing ground rents (e.g. at £250/year or RPI on original amount) but no legislation has been enacted. This remains the most significant unfinished element of ground rent reform.
Ground Rent and Mortgage Lenders
Even where ground rent has not been reformed, mortgage lenders have taken their own positions:
| Lender Threshold | Position |
|---|---|
| Ground rent > 0.1% of property value at any point during lease term | Many high-street lenders will not lend (UK Finance guidance) |
| Doubling ground rent (any frequency) | Most lenders will not lend |
| Ground rent doubling every 25 years | Some lenders will lend; check individually |
| Peppercorn ground rent | All lenders will lend |
The UK Finance Mortgage Lenders' Handbook sets out standard requirements. A leaseholder with an onerous ground rent clause may find their property difficult or impossible to sell to a buyer requiring a mortgage — even if the ground rent is currently low.
Lease Extension: Your Best Tool Right Now
For leaseholders with onerous ground rents on existing leases, the statutory lease extension process under the Leasehold Reform, Housing and Urban Development Act 1993 (as amended) remains the most reliable solution:
- Extension to 90 years added to the unexpired term (rising to 990 years when the LFRA 2024 provision is commenced)
- Ground rent reduced to a peppercorn — immediately solving the lender/saleability problem
- Marriage value payable if under 80 years remaining (abolished when LFRA 2024 provision is commenced)
Lease Extension Premium Estimates
| Years Remaining | Rough Premium (£200k flat) | Rough Premium (£400k flat) |
|---|---|---|
| 90 years | £3,000–£6,000 | £6,000–£12,000 |
| 80 years | £5,000–£12,000 | £10,000–£24,000 |
| 70 years | £12,000–£25,000 | £24,000–£50,000 |
| 60 years | £25,000–£50,000 | £50,000–£100,000 |
| Under 60 years | £50,000+ | £100,000+ |
Figures are illustrative and depend on ground rent, location, and lease terms. Get a RICS valuation for an accurate estimate.
The 80-Year Rule
Leaseholders should not allow their lease to drop below 80 years while waiting for LFRA 2024 provisions. Once the marriage value abolition is commenced, this advice may change — but until then, the risk of a lease falling below 80 years (triggering marriage value and significantly increasing the premium) is real.
If you have fewer than 85 years remaining, consider starting a lease extension now.
Ground Rent Reform: The Unanswered Question
Despite the reforms, the question of existing doubling and escalating ground rents on pre-2022 leases remains unresolved. An estimated 3–4 million leaseholders in England hold leases with doubling or above-RPI ground rent provisions.
The Competition and Markets Authority (CMA) investigated this issue from 2020 and secured voluntary commitments from some developers (including Countryside, Taylor Wimpey, Persimmon, and Aviva) to convert doubling ground rents to RPI-linked increases. However, these were voluntary — they did not apply universally, and many leaseholders remain trapped.
Options if you have an onerous existing ground rent:
- Extend the lease — eliminates the ground rent, costs premium but solves the problem permanently
- Negotiate a deed of variation — ask the freeholder to convert the doubling clause to RPI or cap. Some will negotiate (especially if selling the freehold), many won't without a premium.
- Check CMA commitments — if your developer made a voluntary commitment, contact them directly. A list of developers who signed is available at gov.uk.
- Check LFRA 2024 implementation — if ground rent capping on existing leases is added by secondary legislation, this may provide relief in future
Timeline of Ground Rent Reform
| Date | Development |
|---|---|
| 24 June 2022 | Leasehold Reform (Ground Rent) Act 2022 in force — peppercorn for new leases |
| 1 April 2023 | LRGRA 2022 extended to retirement housing |
| 24 May 2024 | Leasehold and Freehold Reform Act 2024 receives Royal Assent |
| 2025–2026 | Secondary legislation expected on prescribed rates, service charges, RTM costs, 990-year leases |
| TBC | Potential secondary legislation on existing ground rent caps |
What Leaseholders Should Do Now
- Check your lease — identify whether you have ground rent, the amount, and any escalation clause
- Check your remaining term — if below 85 years, get a lease extension quote immediately
- Check whether your developer made a CMA commitment — if you have a Taylor Wimpey, Countryside, Persimmon, or similar lease
- Monitor DLUHC commencement dates — the key LFRA 2024 provisions (990-year leases, marriage value abolition, prescribed rates) will each need a commencement date. Subscribe to gov.uk updates.
- Consider RTM or collective enfranchisement — for buildings with poor management, RTM may be worth pursuing now; for buildings where 50%+ of leaseholders want full control, collective enfranchisement goes further. The LFRA 2024's abolition of marriage value and prescribed valuation rates make enfranchisement cheaper than ever for buildings with shorter leases. See our leasehold enfranchisement guide for the full process and costs.
Make Your Property Work Harder
Leasehold reform is about giving flat owners the security and control to invest in their homes. Once your lease is secure and your service charges transparent, renovation becomes the next step. Renovate Me helps leaseholders and homeowners plan renovation projects from photo upload to finished room — with a personalised roadmap, budget tracking, and step-by-step guidance built for UK properties.
Related: Freehold vs Leasehold Flats UK: Service Charges, Ground Rent, and What Buyers Need to Know — covers Section 20 consultation, sinking funds, the 2022 ground rent reform, and lease extension costs in a single buyer-focused guide.