Original Article, May 2025

Big changes are coming to the leasehold system in England and Wales, and if you’re a leaseholder, resident, or part of a Resident Management Company (RMC) or RTM, it’s time to get familiar with what’s happening.

At Levels Property Management, we’re staying ahead of the curve to ensure our clients and residents are fully informed, properly supported, and prepared for what leasehold reform means in practice.

Let’s break it down.

What Is Leasehold Reform?

Leasehold reform refers to a series of government-led proposals aimed at modernising, simplifying, and improving the leasehold property system – a system that’s often been criticised as outdated, unfair, and confusing.

These reforms are designed to empower leaseholders, reduce excessive costs, and increase transparency in how residential buildings are managed.

Key Leasehold Changes (So Far)

The reforms are happening in stages, with some already introduced and others progressing through Parliament. Here are the most significant changes:

1. Ground Rent Ban on New Leases

Ground rent on most new residential leases is now set at £0 (thanks to the Ground Rent Act 2022). This puts an end to escalating and unfair charges on new flats and houses.

2. Longer Lease Extensions

Leaseholders will soon have the right to extend their lease by 990 years at zero ground rent, replacing the old system of 90-year extensions for flats.

3. Easier & Cheaper Right to Manage and Enfranchisement

Reform will simplify the process of taking over the management of your building or buying the freehold, reducing legal costs and removing outdated rules (like the “two-thirds rule” or restrictions on mixed-use buildings).

4. Ban on Building Owners Profiting from Insurance Commissions

A major win for leaseholders. Freeholders and managing agents will be banned from pocketing insurance commissions – a cost that is currently passed on through service charges.

5. Greater Transparency in Service Charges

Landlords and agents will be required to provide clear breakdowns of service charges, show how funds are spent, and ensure that leaseholders have more access to financial information.

How Levels Property Management Is Supporting Residents

We believe leaseholders should feel empowered, not overwhelmed. At Levels, we’re committed to helping residents understand what leasehold reform means – not just legally, but in everyday life.

Here’s how we’re helping:

1. Clear Communication

We provide plain-English updates on all relevant legislative changes through newsletters, online updates, and tailored guidance packs for residents.

2. One-on-One Support

Whether you’re an RMC director, RTM member or leaseholder with questions, our team is here to explain how the reforms impact your development, and what your rights are.

3. Proactive Policy Updates

We’re already adjusting our internal policies, contracts, and supplier agreements in line with incoming rules, including ending any commission-based insurance arrangements.

4. Education & Training

We provide workshops, online resources and director briefings to keep everyone involved in building management well-informed and legally compliant.

5. Lease Advisory Support

Considering an RTM or exploring enfranchisement? We’ll connect you with trusted legal and valuation experts, and manage the process professionally every step of the way.

UPDATE – SEPTEMBER 2025: Important Changes and a Key Consultation Deadline

While the Leasehold and Freehold Reform Act 2024 received Royal Assent in May, not all of its provisions came into force immediately. Since then, several significant changes have been implemented, and further reforms are currently being consulted on.

Recent Changes Now in Effect:

• Removal of the Two-Year Rule: As of February 2025, the requirement for a leaseholder to have owned their property for two years before they can extend their lease or buy their freehold has been abolished. This change applies to both new and existing leaseholders.
• Easier Right to Manage (RTM) Claims: Starting in March 2025, it is now easier for leaseholders to exercise their Right to Manage. The new rules increase the proportion of non-residential space in a building from 25% to 50%, enabling more leaseholders in mixed-use buildings to make a claim. Leaseholders are also no longer required to pay their freeholder’s legal fees when making an RTM claim.

A Crucial Consultation is Underway:

The government has launched a consultation on “Strengthening leaseholder protections over charges and services,” which began on 4 July 2025. This consultation proposes new measures to increase transparency and accountability, including:

• Reforming the “Section 20” major works procedure.
• Introducing mandatory qualifications for managing agents.
• Standardising service charge demands and annual reports.
• Allowing for greater use of digital communication.

The deadline for submitting responses to this consultation is Friday, 26th September 2025.

You can find more information and respond directly on the government’s official website:
https://www.gov.uk/government/consultations/strengthening-leaseholder-protections-over-charges-and-services-consultation

The Leasehold Future Is Changing – And That’s a Good Thing

Leasehold reform is long overdue. While it may take time for all the changes to come into force, the direction of travel is clear: more rights, more fairness, more transparency.

At Levels Property Management, we welcome these reforms. They align with the values we already operate by: integrity, information, and innovation, and we’ll continue to lead by example, helping our clients and residents navigate change with clarity and confidence.

Have questions about how leasehold reform affects your property? Contact our team today – we’re here to help simplify the complex and support your community every step of the way.