As part of The Sherrards Training Academy, we have asked our Legal Assistants and Trainee Solicitors to write articles to support their learning, and also to ensure they start to build on their own personal brand. This article has been fact-checked and proofread by Head of the Residential Real Estate department, Caroline Vernon.

As of 31 January 2025, the Leasehold and Freehold Reform Act 2024 (LFRA 2024) introduces a significant change in leasehold law, offering considerable benefits to tenants seeking to extend their leases or purchase the freehold of their properties. One of the most impactful changes is the removal of the two-year ownership requirement, which has long been a barrier for leaseholders wishing to initiate claims for enfranchisement or lease extensions.

What Was the Two-Year Ownership Requirement?

Under previous legislation, tenants were required to have owned their leasehold property for at least two years before they could make a claim for:

• Enfranchisement (purchasing the freehold of the property).
• Lease extensions (extending the term of the lease).

This requirement often created unnecessary delays for tenants who had recently acquired their leasehold property but wanted to secure their long-term housing through enfranchisement or a lease extension. The time limit also meant tenants risked missing out on opportunities or face higher costs, as property values or lease extension premiums could increase during that time.

What Does the Removal of the Two-Year Ownership Requirement Mean?

From 31 January 2025, tenants will no longer need to wait for two years before they can make a claim for enfranchisement or a lease extension. This change simplifies the process and makes it quicker for leaseholders to secure long-term property rights.

For tenants who have recently acquired their properties, this is a significant benefit. They can now act immediately to secure their investments, without the delay and potential price increases tied to the previous two-year waiting period. By being able to act sooner, leaseholders could also potentially avoid higher enfranchisement premiums or increased lease extension costs that might have risen during the wait.

If you are a landlord or managing agent, this change will also impact how tenant claims are handled. Leaseholders can now initiate claims earlier than before, which may require updates to your processes.

The LFRA 2024 also introduces important changes for the personal representatives of deceased tenants. Under the previous rules, personal representatives were required to bring a lease extension claim on behalf of the deceased tenant within two years of the grant of probate. This two-year time limit for making claims has now been removed.

How Can We Help?

Our team of residential real estate, conveyancing, and tenant specialists can guide you through the agreed lease extension process under the new rules. We offer tailored support to ensure your claim is handled correctly and efficiently. Whether you are a tenant looking to extend your lease or purchase the freehold, or a landlord with questions about these changes, we are here to help you navigate the process with confidence.

If you have questions or concerns about how the reforms might impact you, our team of residential real estate, conveyancing and tenants specialists is available to provide advice and support tailored to your circumstances – Contact us here. 

As part of The Sherrards Training Academy, we have asked our Legal Assistants and Trainee Solicitors to write articles to support their learning, and also to ensure they start to build on their own personal brand. This article has been fact-checked and proofread by Head of the Residential Real Estate department, Caroline Vernon.

The UK government is set to implement significant reforms to leasehold and freehold laws in 2025, as part of a wider effort to address long-standing concerns regarding the rights of leaseholders and freeholders alike. These reforms will offer enhanced protections for residential leaseholders, improve transparency, and modernise the commonhold system. The measures are outlined in the Leasehold and Freehold Reform Act 2024 (LFRA 2024) and the upcoming Leasehold and Commonhold Reform Bill.

What are the key changes?

1. Leasehold and Freehold Reform Act 2024 (LFRA 2024)

The LFRA 2024, set to take effect in the first half of 2025, introduces a series of important changes aimed at improving the rights of residential long leaseholders. Among the key provisions are:

• Banning Long Residential Leases of Houses (With Exceptions): The Act prohibits the granting of long residential leases (21 years or more) of houses unless certain exceptions apply. These exceptions include leases granted from a leasehold estate where the superior lease was set up before 22 December 2017 or pursuant to an agreement for lease entered into prior to 22 December 20217, as well as retirement and shared ownership leases.
• Amending Leasehold Enfranchisement and Lease Extensions: Leaseholders will no longer be required to wait two years before claiming the right to extend their lease or buy the freehold of their property. Additionally, restrictions preventing tenants from making a second claim within 12 months of a failed claim will be removed. Furthermore, tenants of houses and flats will be able to claim lease extensions without the previous 50-year limitation from the term date of their existing lease.
• Increased Rights for Leaseholders and Freeholders: The Act expands the rights of leaseholders, particularly in relation to service charges, insurance, administration fees, and the provision of sales information. Importantly, it also introduces regulation for estate management charges, offering freeholders protections akin to those enjoyed by residential leaseholders.
• Mandatory Redress Scheme for Landlords: Landlords and estate management companies will be required to register with a mandatory redress scheme, ensuring greater accountability and fairness.
• New Regulations for Rent Charges: The Act includes provisions to regulate demands for, and remedies to address, non-payment of historic rentcharges, offering further protection to tenants.

2. The Leasehold and Commonhold Reform Bill (2025)

In the second half of 2025, the government will introduce a draft Leasehold and Commonhold Reform Bill. This bill aims to modernise the commonhold system and make it the default tenure for new homes. For years, commonhold has been seen as an alternative to leasehold ownership, but it has not been widely adopted. There ae only 184 properties registered as commonhold in England and Wales. The new bill seeks to address barriers to commonhold and simplify its implementation, benefiting future generations of homeowners.

3. Right to Manage Reforms (Spring 2025)

Another notable change will be the introduction of measures to reform the cost rules and voting rights for leaseholders seeking to exercise their right to manage. Leaseholders in mixed-use buildings will find it easier to take over management responsibilities from their freeholders, as the requirement for them to pay the freeholder’s costs will be eliminated in most cases. The reforms will also include provisions to reduce costs and simplify the process of exercising the right to manage, which could significantly increase the number of leaseholders able to take control of their buildings’ management.

4. Protection Against Unscrupulous Managing Agents

The government is committed to enhancing protections for leaseholders against unscrupulous managing agents by introducing stronger regulations. This will include a mandatory professional qualification for managing agents, as well as a new basic standard for their conduct. A public consultation on these measures will take place later this year, which could lead to more stringent requirements for those responsible for managing residential properties.

5. Simplifying Service Charge Disputes and Valuation Rates

Further consultations will take place this year to streamline processes related to service charge disputes, particularly in relation to unreasonable costs. Leaseholders will also benefit from simplified methods for challenging excessive service charges and a clearer approach to setting valuation rates used in the calculation of enfranchisement premiums. New consumer protection provisions will enhance transparency and provide leaseholders with the right to challenge excessive charges at the First Tier Tribunal.

What This Means for Leaseholders and Freeholders

The leasehold reforms planned for 2025 mark a significant shift in the landscape of property ownership in the UK. Leaseholders will see increased rights and easier pathways to enfranchisement and lease extensions, which will ultimately give them more control over their properties. The measures around the right to manage and estate management regulation will help to address some of the most common frustrations of leaseholders, particularly in relation to poor property management and excessive charges.

For freeholders, the new regulations around estate management charges and the introduction of a mandatory redress scheme mean that greater oversight and accountability will be required. The shift towards commonhold could also impact freeholders in the long term, as the government aims to make this tenure the default for new homes.

As the government moves forward with consultations and the introduction of new bills, leaseholders and freeholders alike will need to stay informed to fully understand how these changes will affect them.

If you have questions or concerns about how the reforms might impact you, our team of residential real estate, conveyancing and tenants specialists is available to provide advice and support tailored to your circumstances – Contact us here. 

What’s Changing?

1. Higher SDLT for Second Homes and Buy-to-Let Properties

From 31^st October 2024, the SDLT surcharge on second homes and buy-to-let properties increased by 2%. Buyers of additional properties currently pay a 5% surcharge on top of the standard SDLT rates, making it more expensive to invest in second homes or rental properties.

2.First-Time Buyer SDLT Relief

The SDLT relief scheme for first-time buyers, which provided a reduction or complete exemption for purchases below certain thresholds, will change. Currently, first-time buyers purchasing homes up to £625,000 (or receiving relief on the first £425,000) benefit from substantial savings.

From 1^st April 2025, first-time buyers will pay no SDLT on the first £300,000 of a property priced up to £500,000. Beyond £300,000, SDLT will apply at standard rates up to the purchase price cap of £500,000. Any property purchased above £500,000 will not be eligible to benefit from the relief.

This change means that first-time buyers will now pay higher SDLT rates, increasing their upfront costs.

3. Changes to SDLT thresholds

In a significant shift, the nil-rate SDLT threshold will be reduced from £250,000 to £125,000 from 1^st April 2025. This means buyers will now start paying SDLT on purchases above £125,000 instead of the current £250,000 threshold.

This reduction will result in higher upfront costs for most buyers.

What This Means for Buyers

Residential Buyers

For those purchasing primary residences, the reduced threshold means higher costs for a broader range of transactions. Buyers should factor these increased costs into their financial plans and consider completing purchases before 1^st April 2025 if possible.

Property Investors

If you’re considering adding to your property portfolio, now may be the time to act. The increased surcharge combined with the lower threshold will significantly increase transaction costs.

First-Time Buyers

The change in SDLT rates and thresholds may delay purchases for first-time buyers who are saving for deposits. This change could slow activity in the housing market, particularly for properties at the lower end of the price spectrum.

Planning Ahead

To mitigate the impact of these changes, buyers should consider:

• Acting Before April 2025: Completing transactions before the new rules take effect could save thousands of pounds.
• Seeking Financial Advice: Consulting a mortgage adviser or financial planner can help you navigate the changes.

Conclusion

The changes to SDLT in 2025 represent a significant shift in the property market. The reduced nil-rate threshold and higher surcharges will result in increased costs for most buyers. As solicitors, we recommend planning ahead, seeking expert advice, and ensuring you’re fully informed about the financial implications of your purchase.

If you have questions about how these changes may affect your property transaction, contact us, we are here to guide you every step of the way.

Adverse possession is a method of acquiring legal title to land by occupying it without the permission of the legal owner.

It is also used by landowners seeking to remedy their boundaries where legal title does not match up with the land occupied. This is particularly common with rural properties subject to historic conveyances where the plan attached to a conveyance was not clear. It is also relevant when a landowner, builds a physical boundary which extends into their neighbour’s property. If that boundary remains in place for many years, the party who erected the boundary may be able to extend their title to include the additional land now enclosed, thus depriving their neighbour of land which they may have purchased.

The exact criteria that must be fulfilled in order to succeed in such an application is set out below:

Key legal requirements:

HM Land Registry rules confirm the following criteria must be fulfilled in order to make an application.

1. Length of occupation – the applicant must be in occupation of the land for at least 10 years in the case of registered land (at the Land Registry), or 12 years for unregistered land.
2. Factual and exclusive possession – the applicant must have exclusive physical control of the land. Case law has confirmed that the applicant may be expected to demonstrate a reasonable belief that they own the land (Rowlands v Bishop [2023]). This requirement can be met by evidence of acts of maintenance on the land and showing that the land is physically enclosed.
3. Intention to possess the land without the landowner’s consent – for possession to be truly ‘adverse’, it must be without the true legal owner’s consent. It is not possible to be in adverse possession if consent to occupy the land (such as by way of a licence or tenancy, orally or in writing), has been granted by the landowner (Healey v Fraine [2023]).

Additional protection for registered landowners:

The Land Registration Act 2002 provides further protection to landowners. Landowners will be notified when an application for adverse possession of their land has been made and given the opportunity to serve a counter-notice in response to it. Assuming the counter-notice opposes the application, the application will only proceed if the applicant is able to rely on one of three conditions:

1. Estoppel – the applicant would need to show that it would be “unconscionable” for the registered owner to dispossess them. For example, the registered owner encouraged or allowed the applicant to believe they owned the land.
2. Other rights to the land – the applicant can show they are entitled to be registered as the owner of land for some other reason (under a Will, for example).
3. Reasonable mistake as to the boundary – the applicant reasonably believed they owned the subject land, and owns land adjacent to it. This is the most common condition relied upon.

Adverse possession and boundaries:

A more appropriate application may be for the boundary to be determined or for a boundary agreement to be entered into with a neighbour, depending on the size of the land, whether it falls within the registered title or not, and whether there is a dispute as to ownership.

Title plans of all registered titles show the general position under Section 60(1) of the Land Registration Act 2002. In order to plot the exact line of the boundary on the ground, a specialist boundary surveyor should be instructed.

Legal presumptions exist in relation to the ownership of particular boundaries such as hedges and ditches, roadways, and riverbeds. However, these are all presumptions which can be rebutted by contrary evidence.

Practical Tips for Landowners:

• If a landowner discovers that someone has encroached on their land without permission, this amounts to a legal trespass. The landowner can either take steps to remove them or formalise their occupation by giving permission (which means their occupation can no longer be ‘adverse’). Injunction proceedings may be required in the most severe cases of trespass.
• Landowners, especially those who own large parcels of land that are not always monitored or maintained, should inspect their sites regularly to ensure the boundaries are where they should be and there are no encroachments by neighbours. Records of inspections should be kept as these can prove to be useful evidence in the event of a dispute.
• Landowners should ensure their addresses are kept up to date at HM Land Registry. The Land Registry will notify landowners if their land is subject to a claim for adverse possession in writing and give the owner a short period of time to respond. Failure to respond in time may result in the occupier’s application being successful. Legal advice should be obtained in order to respond to an application, with registered landowners making use of the counter-notice provisions, if possible.
• In addition, landowners can register a property alert against the land and/or adjoining land via HM Land Registry. This way, when a party registers some form of notice against that land, landowners will be notified automatically via email, and thus given the opportunity to take action in response.

Adverse possession may seem daunting, but understanding the rules and safeguards can help landowners and applicants navigate the process effectively. By staying vigilant and seeking the right advice, you can protect your property rights or pursue a claim where justified.

To find out more, contact Caroline Vernon. 

What is the Renter’s Rights Bill?

The RRB is a proposed law designed to improve stability for tenants in the private rental market. It introduces several significant changes that landlords and tenants should be aware of.

Key changes in the Renter’s Rights Bill

1 – Removal of section 21 evictions and fixed term tenancies

The RRB will abolish the ability, for both existing and new tenancies, to evict a tenant on a “no-fault” basis by serving a notice under section 21 of the Housing Act 1988 (“HA”). Landlord’s will have to provide a reason to be able to evict a tenant in future.

Assured shorthold tenancies (ASTs) will be abolished and will be replaced by tenancies that are periodic i.e. month to month so that tenants will be able to stay in a residential property until they decide to end the tenancy by giving two months’ notice (aside from where a landlord seeks to evict them under one of the remaining grounds under section 8, HA 1988).

2 – Changes to Remaining Grounds for Possession

To evict a tenant and obtain possession landlords will need to rely on mandatory and discretionary grounds.  A judge must award a landlord possession where they can evidence a mandatory ground, whilst discretionary grounds allow a judge to consider whether it is reasonable to award possession.

Ground 1 – where a landlord wishes to evict a tenant if they wish to move into their rented property or if they wish to move a family member into their property remains.

• Notice period extended from 2 to 4 months.
• Not available in the first 12 months of a tenancy.
• Restrictions on re-letting the property within 12 months.

Ground 1A – a new mandatory ground has been introduced to allow a landlord to evict a tenant if they wish to sell a property (or let it for more than 21 years).

• Requires 4 months’ notice and is unavailable in the first 12 months.
• Restrictions on re-letting apply.

Ground 6 – a landlord may evict a tenant where they wish to demolish or substantially redevelop the property, and this cannot be done whilst the tenant is living there, the notice required is extended from 2 to 4 months.

Ground 8 – where there are rent arrears and the landlord wishes to evict the tenant, there must now be 3 months of arrears, and the notice period required is increased from 2 to 4 weeks.

3 – Rent Increases

Rents can only be raised once a year and on two months’ notice to a tenant using the existing section 13, HA 1988 procedure.  At present tenants can challenge rent increases via the first-tier tribunal (FTT). However, the RRB will give the FTT the power to determine rent.

4 – Ombudsman and Database for landlords

All private rented sector landlords will be required to register with a new independent Private Rented Sector Landlord Ombudsman.

Tenants will be able to make complaints to the Ombudsman who will be able to make binding decision which will be enforceable through both civil penalties and criminal prosecution. The Ombudsman is intended to support quicker and cheaper dispute resolution outside the court process.

A Private Rented Sector Database will also be introduced, in which landlords of assured and regulated (under the Rent Act 1977) tenancies will also be legally required to register. Landlords who fail to register on the Database may be subject to enforcement action and will not be able to get a possession order to evict a tenant.

How Will the Renter’s Rights Bill Affect You?

For Tenants:

• More security: You cannot be evicted without a valid reason.
• Predictable rent increases: Limited to once a year and subject to challenges.
• Access to quick dispute resolution: File complaints through the Ombudsman instead of lengthy court processes.

For Landlords:

• Stricter eviction rules: Ensure compliance with the new grounds and notice periods.
• Obligatory registration: Failure to register may lead to penalties and restrictions.
• Portfolio review needed: Consider acting on rent arrears, properties requiring possession, or planned rental increases before the Bill becomes law.

 

When Will the Renter’s Rights Bill Become Law?

The RRB is currently at the Committee stage in the House of Commons and is expected to become law by summer 2025.

By reforming tenant rights and establishing stricter landlord responsibilities, the Renter’s Rights Bill 2024 could significantly impact the UK rental market. Whether you’re a landlord or tenant, staying informed will help you adapt to these changes.

Want to find out more, contact Caroline or check out our Residential Conveyancing page. 

Initial Consultation and Planning

The journey begins with an initial consultation where we understand the landlord’s objectives. Are they looking to expand their portfolio, invest in a specific type of property, or target a particular demographic? Understanding these goals allows us to tailor our services accordingly, ensuring that the legal advice and support we provide are relevant and effective.

Due Diligence and Property Searches

One of the critical aspects of buying property is conducting thorough due diligence. We perform property searches to uncover any potential issues such as:

• Title Issues: Ensuring that the seller has a clear and marketable title to the property.
• Planning and Building Regulations: Verifying that the property complies with local planning and building regulations.
• Environmental Searches: Checking for any environmental risks such as flood zones or contamination.
• Local Authority Searches: Looking into any potential issues with the local council, such as upcoming developments or road schemes that could affect the property.

Contract Review and Negotiation

The next step involves reviewing the draft contract provided by the seller’s solicitor. We consider the terms to ensure they are fair and favourable to our client. We then negotiate any necessary changes with the seller’s solicitor to protect our client’s interests.

Financing and Mortgages

If the landlord is financing the purchase through a mortgage, we act for both the landlord (our client) and the lender and must balance the interest of both parties. The Law Society’s guidelines and the UK Finance Mortgage Lenders’ Handbook sets out specific requirements for solicitors in these situations.

Exchange and Completion

Once all checks are satisfactory, and both parties agree to the contract terms, we proceed to the exchange of contracts. At this point, the purchase becomes legally binding. We ensure that all documents are correctly signed and witnessed.

On the completion date, we handle the transfer of funds and ensure that the title deeds are correctly registered in the landlord’s name with the Land Registry. We also make sure that any outstanding mortgages or charges on the property are discharged.

Post-Completion Support

Our support doesn’t end at completion. We provide ongoing assistance with any post-completion issues that may arise. We also provide landlord and tenant advice via our property litigation team.

Conclusion

Helping landlords buy properties requires a meticulous approach to legal due diligence, contract negotiation, and regulatory compliance. As residential real estate solicitors, our goal is to provide comprehensive support that ensures a smooth transaction and protects the landlord’s investment. With our expertise, landlords can confidently navigate the complexities of property acquisition and focus on growing their portfolios.

 

To find out more, contact Shen Hussein here.

The Building Safety Act 2022 delivered changes to ensure residential buildings are constructed more safely and continue to be maintained.  The Act also provides protective measures by ensuring that leaseholders are not automatically made to pay for historical safety defects meaning freeholders will not legally be able to charge leaseholders for any costs in circumstances where a building requires cladding to be removed or remediated.  These are buildings over five storeys or eleven metres tall.  Aside from cladding, there will be protection from costs associated with other defects such as emergency measures (waking watches).

From 1 October 2023, all new higher-risk buildings will be required to be registered with the Building Safety Regulator once a completion certificate has been issued. Until registration takes place, the properties cannot be occupied. Higher-risk buildings in England are classified as buildings that have at least two residential units and are either a height of least 18m in height or seven storeys.  Failure to register is an offence and can lead to a fine, imprisonment or both.

The regulations are a welcome guidance in the construction and property sectors and increase the severity of failing to comply with the core requirements.

To find out more or see if this affects you, contact Asha Ngai.