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Abolition of the Two-Year Rule on Lease Extension

The Housing Minister Matthew Pennycook has signed regulations to remove the two-year ownership rule for leaseholders contained in the Leasehold and Freehold Reform Act 2024 (LFRA 2024). The abolition of the two-year rule comes into effect on 31 January 2025.

Under the current law, leaseholders must wait two years after purchasing their property before initiating a lease extension or enfranchisement process. This requirement, often seen as an unnecessary delay and barrier to leasehold reform, will no longer apply once the new legislation under the LFRA 2024 comes into force.

The Housing Minister, Matthew Pennycook, has emphasised that removing this rule aligns with the government’s commitment to simplifying the leasehold system and empowering leaseholders. By abolishing the two-year requirement, leaseholders will have the flexibility to start lease extension negotiations immediately after acquiring their property. This change is expected to significantly streamline the process for homeowners seeking to secure greater control over their homes and reduce the costs associated with leasehold property ownership.

The abolition of the two-year rule is part of a broader push to reform the leasehold sector, making it fairer and more transparent. Leaseholders considering a lease extension or enfranchisement after 31 January 2025 will now have greater flexibility and faster access to the process.

For personalised advice, Leesa Glenwright and Ian West can be contacted at LeesaGlenwright@cartercamerons.com and IanWest@cartercamerons.com.

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