The Association of Leasehold Enfranchisement Practitioners (ALEP) has welcomed the government's recent implementation of a key provision from the Leasehold and Freehold Reform Act 2024 (LAFRA). Effective from 31 January 2025, the problematic two-year rule has been abolished, marking a significant step in leasehold reform.
This change removes the requirement for leaseholders to have owned their property for at least two years before initiating an enfranchisement or lease extension process. The two-year rule, originally part of the Leasehold Reform, Housing and Urban Development Act 1993, had long been seen as an unnecessary barrier to claiming enfranchisement rights and obtaining lease extensions.
Mark Chick, director of ALEP, commented on the reform: "ALEP welcomes the news that leaseholders are able to extend their lease or enfranchise their qualifying leasehold house at a time of their choosing. This reform will make it easier for a wider class of people to access enfranchisement rights."
However, Chick also noted that the impact of this change on mortgage conditions remains to be seen, particularly for leases under 80 years or those shorter than lender requirements.
While this reform is a positive step, it represents only a small part of the broader leasehold reform agenda. Many provisions of the LAFRA, which received royal assent on 24 May 2024, still await implementation through secondary legislation.
Looking ahead, 2025 is expected to bring further reforms, including:
- Implementation of Right to Manage reforms from LAFRA
- Consultations on capitalisation and deferment rates
- Discussions on banning leasehold flats and regulating managing agents
- A white paper on commonhold and a Draft Leasehold and Commonhold Reform Bill, anticipated in autumn 2025
ALEP continues to advocate for comprehensive leasehold reform, recognising that while the abolition of the two-year rule is progress, many crucial changes are still pending.
If you would like further information please contact Alexy Pemberton +44 (0) 207 758 8170 alexypemberton@cdsmayfair.com
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