Leasehold reform stalls - leaseholders left in limbo

Leasehold reform stalls - leaseholders left in limbo

Leasehold reform stalls - leaseholders left in limbo

Leasehold reform stalls - leaseholders left in limbo

Illustrated portrait of Priya Kapoor, woman with hair in a bun, navy blazer and hoop earrings, arms folded, white background.

Priya Kapoor

Regulation Reporter

THE PROPERTY FILTER TAKE

  • The Leasehold and Freehold Reform Act 2024 faces implementation delays with unresolved issues on ground rents, valuations, and technical enfranchisement rules.

  • Leaseholders waiting to buy their freeholds face continued uncertainty - valuation methods and ground rent treatment remain undefined.

  • Consider now: review your current lease terms, factor uncertainty into any freehold purchase timeline, and speak to your solicitor about how pending changes might affect your position.

The Leasehold and Freehold Reform Act 2024 (LAFRA) promised faster, cheaper enfranchisement for hundreds of thousands of leaseholders. Four months in, the framework is stalled. The Association of Leasehold Enfranchisement Practitioners (ALEP) has written directly to Parliament demanding clarity on ground rents, valuation reform, and technical implementation issues that could derail the entire reform (Property Industry Eye, 27 March 2026). Without these answers, leaseholders and freeholders are stuck in limbo - unable to price deals, value their properties, or plan timelines.

What ALEP told Parliament

On 10 March 2026, ALEP director Mark Chick gave oral evidence to the Housing, Communities and Local Government Select Committee on LAFRA's implementation progress. Four days later, ALEP sent a follow-up letter flagging three critical gaps: how ground rents should be handled, what valuation methods apply to the reforms, and how enfranchisement provisions should actually work in practice (Property Industry Eye, 27 March 2026).

Chick's core argument is stark: "Reform in this area is both necessary and welcome, but it needs to be operable" (Property Industry Eye, 27 March 2026). The legal framework, as currently written, leaves too much ambiguity. "The legal and valuation framework must be clear enough for leaseholders, freeholders and professional advisers," Chick said, noting that professionals cannot confidently advise clients without settled rules (Property Industry Eye, 27 March 2026).

The letter specifically raised concerns about how collective enfranchisement should handle non-participating leaseholders, treatment of intermediate leases, and overreliance on delegated powers (secondary regulations) that haven't yet been published (Property Industry Eye, 27 March 2026). These aren't academic questions - they determine whether a freehold purchase proceeds and at what price.

The valuation and ground rent problem

One of LAFRA's selling points was reforming how properties are valued for enfranchisement claims. Under old rules, valuations could run into tens of thousands of pounds per lease, pricing out ordinary leaseholders. The new Act aimed to simplify and lower valuations - but the government hasn't defined how.

Similarly, ground rents - the annual payments leaseholders make to freeholders - remain unaddressed in implementation guidance. Some LAFRA provisions target "onerous" ground rents, but practitioners need black-and-white thresholds: what counts as onerous? When must it be renegotiated? At what price can a leaseholder buy out their ground rent separately?

Without answers, valuers cannot issue reports, solicitors cannot sign off transactions, and leaseholders cannot budget for enfranchisement costs. Freeholders, equally, cannot price their freehold sales or understand what rights they'll retain. The market has effectively frozen on valuation questions.

What you should do now

The deadline for resolving these issues remains unconfirmed. The government has not published a timetable for secondary regulations or amendments to LAFRA's technical provisions. However, waiting for perfect clarity is not an option if you own a leasehold.

Consider reviewing your lease now - specifically the ground rent clause and any restrictive covenants - to understand your current position before LAFRA's rules crystallise. If you're planning a freehold purchase within the next 12 months, you may wish to factor continued uncertainty into your timeline and speak to your solicitor about how pending valuation methods might affect your costs.

Freeholders holding enfranchisement requests should document their position clearly and seek specialist advice on how LAFRA will affect their liability once regulations are finalised. The rules will almost certainly change the terms on which you can negotiate.

ALEP's call for transparency is justified - but leaseholders and freeholders shouldn't wait passively. Understanding your lease now puts you ahead when the regulations land.

The Leasehold and Freehold Reform Act 2024 (LAFRA) promised faster, cheaper enfranchisement for hundreds of thousands of leaseholders. Four months in, the framework is stalled. The Association of Leasehold Enfranchisement Practitioners (ALEP) has written directly to Parliament demanding clarity on ground rents, valuation reform, and technical implementation issues that could derail the entire reform (Property Industry Eye, 27 March 2026). Without these answers, leaseholders and freeholders are stuck in limbo - unable to price deals, value their properties, or plan timelines.

What ALEP told Parliament

On 10 March 2026, ALEP director Mark Chick gave oral evidence to the Housing, Communities and Local Government Select Committee on LAFRA's implementation progress. Four days later, ALEP sent a follow-up letter flagging three critical gaps: how ground rents should be handled, what valuation methods apply to the reforms, and how enfranchisement provisions should actually work in practice (Property Industry Eye, 27 March 2026).

Chick's core argument is stark: "Reform in this area is both necessary and welcome, but it needs to be operable" (Property Industry Eye, 27 March 2026). The legal framework, as currently written, leaves too much ambiguity. "The legal and valuation framework must be clear enough for leaseholders, freeholders and professional advisers," Chick said, noting that professionals cannot confidently advise clients without settled rules (Property Industry Eye, 27 March 2026).

The letter specifically raised concerns about how collective enfranchisement should handle non-participating leaseholders, treatment of intermediate leases, and overreliance on delegated powers (secondary regulations) that haven't yet been published (Property Industry Eye, 27 March 2026). These aren't academic questions - they determine whether a freehold purchase proceeds and at what price.

The valuation and ground rent problem

One of LAFRA's selling points was reforming how properties are valued for enfranchisement claims. Under old rules, valuations could run into tens of thousands of pounds per lease, pricing out ordinary leaseholders. The new Act aimed to simplify and lower valuations - but the government hasn't defined how.

Similarly, ground rents - the annual payments leaseholders make to freeholders - remain unaddressed in implementation guidance. Some LAFRA provisions target "onerous" ground rents, but practitioners need black-and-white thresholds: what counts as onerous? When must it be renegotiated? At what price can a leaseholder buy out their ground rent separately?

Without answers, valuers cannot issue reports, solicitors cannot sign off transactions, and leaseholders cannot budget for enfranchisement costs. Freeholders, equally, cannot price their freehold sales or understand what rights they'll retain. The market has effectively frozen on valuation questions.

What you should do now

The deadline for resolving these issues remains unconfirmed. The government has not published a timetable for secondary regulations or amendments to LAFRA's technical provisions. However, waiting for perfect clarity is not an option if you own a leasehold.

Consider reviewing your lease now - specifically the ground rent clause and any restrictive covenants - to understand your current position before LAFRA's rules crystallise. If you're planning a freehold purchase within the next 12 months, you may wish to factor continued uncertainty into your timeline and speak to your solicitor about how pending valuation methods might affect your costs.

Freeholders holding enfranchisement requests should document their position clearly and seek specialist advice on how LAFRA will affect their liability once regulations are finalised. The rules will almost certainly change the terms on which you can negotiate.

ALEP's call for transparency is justified - but leaseholders and freeholders shouldn't wait passively. Understanding your lease now puts you ahead when the regulations land.

SOURCES

This article is for informational purposes only and does not constitute financial, legal, or tax advice. Always consult a qualified professional before making investment decisions.