Jayne Bryant MS, Cabinet Secretary for Housing and Local Government
I am pleased to provide Members of the Senedd with an update on the phased implementation of the Leasehold and Freehold Reform Act 2024 and work towards important future reforms.
The Act includes a wide range of changes, many of which rely on further consultation and decisions about operational detail before they may be commenced. I have set out elsewhere my intention to work closely with UK Government on preparations for implementation, in order that the benefits of the Act can apply as quickly as possible here in Wales. Today I am pleased to let you know about a number of provisions that have come into force, as well as progress towards further important reforms. These all represent real progress towards our Programme for Government Commitment on leasehold.
Implementation of Leasehold and Freehold Reform Act 2024
Section 27 of the 2024 Act, regarding the removal of the qualifying period for enfranchisement and extension claims, was commenced on 31 January. This change means that homeowners no longer need to wait for two years following purchase of their leasehold property before exercising their rights to purchase the freehold or extend their lease.
Further provisions in the Act relating to the Right to Manage (RTM) were commenced on 3 March. Section 49 ‘change of non-residential limit on right to manage claims’ widens the criteria for buildings to qualify for the right to those with no more than 50% non-residential space, in place of the previous 25% limit. Additionally, section 50 and the RTM provisions in section 64 remove the requirement for RTM companies to pay other parties’ costs when exercising the right, except in circumstances decided by the tribunal. Sections 51 and 52 reflect a wider policy in the Act to move the jurisdiction for leasehold cases from the court to the Leasehold Valuation Tribunal in Wales.
The increase in the RTM non-residential limit has required an update to RTM company model articles which are set out in subordinate legislation. I have laid The RTM Companies (Model Articles) (Wales) (Amendment) Regulations 2025, which also came into force on 3 March, to amend voting rights in RTM companies so that leaseholders will continue to be able to exercise a majority vote in RTM decisions after the commencement of section 49.
As I have set out above, further consultation will be required to inform the necessary subordinate legislation which needs to be put in place before commencement of other parts of the Act. I will keep Members up to date as this work progresses.
Future reforms
Building on these latest improvements in leaseholder rights, and as I have set out previously, I am continuing to work closely with the UK Government on further reforms. A Draft Leasehold and Commonhold Reform Bill is due to be published later this year. As part of this work, the UK Government has published a White Paper setting out how a reformed Commonhold system could operate. The White Paper sets out the vision for how Commonhold could in future provide the viable alternative to leasehold in England and Wales that it was always intended to be. I encourage interested parties to read the White Paper, which may be found here: Commonhold White Paper: The proposed new commonhold model for homeownership in England and Wales.