The Leasehold and Freehold Reform Bill received Royal Assent and became law on Friday 24 May 2024.
It was included as part of the ‘wash up’ before parliament was dissolved ahead of the general election, with the House of Lords urgently reviewing several bills that have been prioritised with cross-party agreement.
The introduction of the new law means there will be a ban on the sale of new leasehold houses, ensuring that every new home in England and Wales will be freehold.
New leaseholders will also no longer be required to own their property for a minimum of two years before a lease can be extended or the freehold purchased.
It should also mean that it will be more commonplace for leases to be extended, while leasehold property information will become more transparent, effectively making it easier to buy, sell and rent property.
However, plans to remove ground rent for existing leaseholders or to cap it at £250 were not included as part of the bill.
Levelling Up Secretary Michael Gove had originally intended to cap ground rents at a nominal level, before it was changed to a £250 cap.
But as the legislation was rushed into law last Friday, the idea was dropped altogether.
Owners of freehold properties had campaigned against the cap and several other measures included in the bill.
They argued it would negatively affect the value of their investments, while some companies have suggested they may go as far as to sue the government for interfering with their property rights.
Speaking on Friday as the leasehold bill was passed through the House of Lords, Tory peer Lord Bailey of Paddington said: "This bill is suboptimal, it's not the revolution that many leaseholders across the country have been desperate for.
"But it's the only game in town, a game that has currently taken 22 years to get to this point."
The Renters Reform Bill, which was expected to pave the way for an end to section 21 no-fault evictions, has been axed.
