Leasehold reform: removal of two year ownership requirement - Boodle Hatfield

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Article
27 Jan 2025

Leasehold reform: removal of two year ownership requirement

Written by

Simon Kerrigan View profile
2 min read

The Government has published regulations which will mean that, with effect from 31 January 2025, leaseholders will be able to exercise the right to extend their lease or buy their freehold following the purchase of a property rather than having to wait the two-year period previously required.

To date, it has been common practice for sellers of relevant leasehold properties to make a statutory claim and assign the benefit of the claim to the buyer contemporaneously with the sale of the lease to avoid the buyer having to wait the two-year period before making its own claim.  Going forward, this will no longer be necessary.  As a result, buyers will be relieved from the pressure of having to decide whether or not to enfranchise at the point of purchase and will, instead, be able to make their own statutory claim, once registered as the legal owner of the property, allowing the decision to be made in their own time and, crucially, without the need to have held the leasehold interest for two years.  

The removal of the "two year wait" will be welcomed by leasehold buyers and sellers alike.  However, the statutory changes relating to the valuation attributable to any such claim have not yet been enacted and are currently the subject of considerable further scrutiny.  Accordingly, those purchasing a leasehold interest will still have the uncertainty of deciding whether to pursue an immediate claim under the current valuation regime, or to sit tight and wait for the relevant provisions to be enacted.

In the words of Matthew Pennycook, Minister of State for Housing and Planning: "the work continues to switch on the measures in the Leasehold and Freehold Reform Act".

Written by

Simon Kerrigan View profile