Implementation of key leasehold reform provisions could be delayed until late 2028 or beyond, according to testimony from Housing Minister Matthew Pennycook at a Housing, Communities and Local Government Committee meeting this week.
The committee reviewed the draft Commonhold and Leasehold Reform Bill, which has faced criticism over extended delays in implementing the Leasehold and Freehold Reform Act 2024.
Implementation challenges
The Leasehold and Freehold Reform Act 2024 was passed shortly before the last general election, but provisions relating to lease extensions and freehold purchases have not been implemented. Further consultation and secondary legislation are required to determine pricing mechanisms under the new law.
During the committee hearing, Pennycook acknowledged that consultation on valuation rates could have begun as early as September 2024. He attributed delays to what he described as a “small set of serious and specific flaws” in the legislation, which he said the previous Conservative government was aware of before passage.
Linz Darlington, managing director of lease extension specialists Homehold, criticised the minister’s approach. “Leaseholders have been waiting for years for it to be ‘cheaper and easier’ for them to extend their leases,” Darlington said. “Following the testimony of Housing Minister Matthew Pennycook in today’s Select Committee, they could be waiting for many more years to come.”
Legislative timeline
Pennycook confirmed that the flaws would be addressed in the Commonhold and Leasehold Reform Bill, which remains in pre-legislative scrutiny. The bill has not yet been formally included in a King’s Speech.
When questioned about potential litigation from freeholders, Pennycook stated: “Our contingency plan would be to robustly contest the legal action – it is about as simple as that.” He was unable to confirm whether implementation could proceed during ongoing legal challenges.
Darlington argued that Labour could have addressed legislative flaws by adding provisions to housing legislation such as the Renters’ Rights Act 2025 if consultation on rates had begun promptly. “While implementing elements of leasehold reform independently of each other could be argued to be ‘piecemeal’, it is better than bundling the issues together into ever more comprehensive, complex and contentious piece of legislation that is never ‘switched on’,” Darlington said.
Market implications
The delays affect leaseholders seeking to extend their leases or purchase freeholds under the reformed pricing structure. The extended timeline means existing pricing mechanisms will remain in place for several more years, potentially impacting property values and transaction costs for leasehold properties across England and Wales.