"There is no appetite among practitioners to turn back the clock on reform. But we must avoid repeating past mistakes"
- Mark Chick - ALEP
One year after the Leasehold and Freehold Reform Act (LAFRA) was passed, property professionals say the legislation has introduced confusion and delays, with many key provisions yet to be enacted.
A new survey from the Association of Leasehold Enfranchisement Practitioners (ALEP), which represents barristers, solicitors, project managers and valuers working in leasehold enfranchisement, found that while the principles behind reform remain supported, the legislation’s lack of clarity is causing significant uncertainty across the market.
The Act, which removed marriage value and proposed a cap on ground rents for enfranchisement calculations, was welcomed when it first passed. However, ALEP reports that very little has changed in practical terms. Members say that the process of extending leases remains complex and unclear, with major elements of the legislation still pending implementation.
One reason for the delay is that some provisions have been challenged under the Human Rights Act, while others require consultations and secondary legislation before they can take effect.
Frustration over a lack of progress
In the survey, 67% of ALEP members said the lease extension process had not become easier, while the remaining 33% reported no noticeable change. One respondent commented that the Act “has not become fully enacted and has caused confusion and delay,” while another observed, “we are all stuck in limbo”.
The findings also reflect growing dissatisfaction with how the legislation was introduced. In an earlier 2024 survey, 94% of members said the Bill had been rushed and required more scrutiny. That view has only intensified over time.
Many described the legislation’s final form using terms such as “poisoned chalice,” “a dog’s dinner,” and “terrible”.
“The Leasehold and Freehold Reform Act 2024 was passed with great haste, in the ‘wash up’ at the end of the last parliament, just before the election," explained John Midgley, director at ALEP.
"The result is exactly what many of us feared – a piecemeal piece of legislation that not only requires extensive secondary legislation and time to enact (as might be anticipated), but also by the government’s own admission needs primary legislation to fix fundamental flaws in the valuation mechanism before it can be made ‘live’. The market is now caught in a state of indecision, and both leaseholders and their advisers need clarity.”
Clients left waiting
The survey also highlighted a lack of confidence among professionals in advising clients. While many practitioners said they can provide guidance, this often comes with significant caveats. Responses included: “the advice varies with the client’s circumstances,” “we can only give options,” and “it depends on whether marriage value is abolished and on changes in deferment rates”. Some acknowledged that current recommendations are based partly on “guesswork”.
This lack of clarity is slowing market activity. Most respondents reported a decline in client work since the Act’s introduction. As one practitioner put it, “leaseholders are holding off, and freeholders are holding out”. Others said leaseholders are proceeding only when urgent personal circumstances demand it, such as remortgaging or bereavement.
The delays are also affecting how clients make decisions. Several ALEP members noted a slower pace, with one saying, “most clients seem to be paralysed by the ‘do we, don’t we’ choice”. This indecision is adding both cost and stress to an already complex legal process.
Unintended effects and rising costs
More than 80% of those surveyed believe that LAFRA has had unintended consequences. These include falling transaction volumes, increased costs, and stalled lease extensions and enfranchisement claims. Many respondents said early optimism has now given way to frustration, with one noting, “many leaseholders delayed claims only for life to move on… and premiums to rise in the interim”.
Valuation challenges were another key concern, particularly the potential for changes to deferment and capitalisation rates. Practitioners warned that these adjustments could increase premiums, contrary to the expectations of leaseholders.
Some also highlighted issues with how intermediate interests are treated under the Act. One member commented that the proposed simplifications “will likely result in a higher premium”.
Support for reform, but with better planning
Despite these problems, ALEP members remain broadly in favour of leasehold reform, provided it is implemented through considered legislation and open consultation.
There is widespread recognition that further legislative action is likely. Several members support the introduction of a new Leasehold and Commonhold Bill later in the year, in line with government signals.
Mark Chick, director at ALEP, said, “There is no appetite among practitioners to turn back the clock on reform. But we must avoid repeating past mistakes. The next stage – whether delivered by secondary legislation or a future Bill, both of which we anticipate – must be built on evidence, engagement and proper scrutiny. We will continue to support the development of a fairer and better functioning system for leaseholders and freeholders alike.”
Chick added, “ALEP remains committed to supporting constructive dialogue between government, leaseholders, and professionals in this complex but critical area of property law.”
