Lawyers Say It Is A Positive Step Toward Leasehold Reform

Residential property transactions could become easier following the removal of the two-year rule for leasehold property extensions which comes into force today (31 January 2025) but lawyers have warned the necessity of proving ownership could be challenging due to Land Registry backlogs.

This significant change means leaseholders no longer need to own their leasehold property for at least two years before applying for a statutory lease extension of a flat or house, or enfranchisement (purchasing the freehold) of a leasehold house. The rules are part of the Leasehold and Freehold Reform Act 2024.

The removal of this rule is expected to open up opportunities for a number of leaseholders who will now qualify. This change is expected to simplify the process of transacting leasehold properties with short leases.

However, Irwin Mitchell also has several reservations about how the new regulations will work in practice.

Expert Opinion

“This is a positive step toward leasehold reform, but many leaseholders and landlords alike will feel this is not adequately addressing their concerns and remain much uncertainty in the sector.

“Additionally, leaseholders must still prove ownership, which could be challenging due to current Land Registry backlogs. This may still cause delay and complications in lease extensions and enfranchisement claims.”
Katherine Thorpe, Legal Executive at Irwin Mitchell