How the Leasehold and Freehold Reform Act Impacts Conveyancing in 2025
In this post, we outline the key reforms, what has changed so far, and what conveyancing professionals, and their clients, need to know in the year ahead.
What Is the Leasehold and Freehold Reform Act?
The LFRA, which received Royal Assent in May 2024, aims to modernise the leasehold system in England and Wales. It builds on years of consultation and recommendations from the Law Commission to give leaseholders more rights, more transparency, and fairer costs.
The Act is being introduced in stages, with some measures already in force and others awaiting secondary legislation or judicial review.
Key Changes Already Affecting Conveyancing in 2025
1. The End of the “Two-Year Rule”
Previously, leaseholders had to wait two years after buying before applying to extend their lease or buy the freehold.
Now, that restriction is gone, meaning new owners can act immediately.
What this means:
Conveyancers must update their advice and documentation. Buyers now have more flexibility, and sellers may find properties with short leases easier to market.
2. Expanded Rights to Manage (RTM)
The right to manage now extends to mixed-use buildings where up to 50% of the floor area is non-residential. Leaseholders making an RTM claim are also no longer automatically liable for the freeholder’s legal costs.
What this means:
When handling flats in mixed-use buildings, conveyancers need to assess RTM eligibility and advise clients accordingly.
3. Service Charge Transparency and Fairness
The Act introduces standardised service charge statements and greater transparency in how charges are calculated.
Freeholders can no longer take commissions on buildings insurance.
What this means:
Conveyancers should verify that management companies provide the new standardised statements and ensure buyers are fully informed about ongoing costs.
Upcoming Reforms Still to Watch
Some of the most significant changes are still pending and expected to come into force later in 2025 or 2026:
- Abolition of marriage value – designed to reduce lease extension premiums.
- New valuation formula for enfranchisement and lease extensions.
- Further cost controls on legal fees and service charges.
- Possible move towards “commonhold” as the default tenure for new flats.
What this means:
Conveyancers need to stay alert, these reforms could change valuation methods and negotiation strategies overnight once implemented.
Practical Implications for Conveyancers
Update Your Advice and Precedents
All client guidance, contract templates, and lease extension forms should reflect the end of the two-year rule and the ban on insurance commissions.
Strengthen Due Diligence
During leasehold sales, conveyancers should review:
- Service charge accounts for compliance with new standards
- Any prohibited commission clauses in leases or management agreements
- Eligibility for lease extension or enfranchisement from day one
Advise on Timing and Strategy
With ongoing legal challenges and phased implementation, clients with short leases may ask whether to act now or wait. Conveyancers should explain the pros and cons of each approach clearly.
Stay Informed
As secondary legislation rolls out, staying up to date is critical. Many of the finer details, particularly around valuation, will be set out in forthcoming regulations.
What Clients Should Know
For leaseholders, the LFRA brings long-awaited reforms:
- More control over their homes
- Simpler and fairer costs
- Stronger rights from the moment they buy
However, because not every measure is yet in force, advice must be tailored to individual circumstances.
The Leasehold and Freehold Reform Act is ushering in a new era for property ownership in England and Wales. While many of the Act’s most powerful reforms are still on the horizon, 2025 marks a clear turning point for leasehold conveyancing.
For conveyancers, this means adapting processes, updating documents, and guiding clients through a changing legal landscape, one designed to make home ownership fairer and more transparent than ever before.
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