Landlords could be left in limbo for months as a High Court battle threatens to derail the Government’s long-promised leasehold reforms, the National Residential Landlords Association (NRLA) has warned.
According to the NRLA, the Leasehold and Freehold Reform Act — hailed as the death knell for Britain’s “feudal” leasehold system — is now caught in a legal crossfire between ministers and powerful freeholders. The dispute, over how lease extensions are valued, could rewrite the entire timetable for change.
Major landowners including Grosvenor and John Lyon’s Charity claim the new rules strip away property rights and breach human rights law, costing them hundreds of millions and curbing charitable work. The Government insists it will fight on, but the NRLA says the result could decide whether reform speeds ahead or stalls for years.
Delays on Top of Delays
The NRLA points out that even before the legal challenge, leasehold reform had been moving at a slow pace. Although the LAFRA received Royal Assent over a year ago, only a handful of its provisions are currently in force. In November 2024, ministers admitted there were “serious flaws” in the Act that would need fresh primary legislation, promising a new Leasehold and Commonhold Reform Bill in the second half of 2025.
The freeholders’ court case now casts fresh doubt over that timetable. They argue that changes to lease extension calculations infringe the European Convention on Human Rights by interfering with property rights and failing to provide adequate compensation. Critics have countered that leaseholders — the intended beneficiaries of reform — had little representation during the hearing, and that the challenge could choke off vital changes.
Judgment Will Shape the Future
The Government has said it will defend the legislation robustly, with a ruling expected in the coming weeks. The NRLA notes that if ministers win, reforms such as the abolition of marriage value and new lease extension rules are likely to proceed without further delay. But if the freeholders succeed, significant amendments will be required, potentially dragging the process out for years.
While waiting for the court’s decision, ministers are pushing ahead with consultations on less contentious issues, including service charge transparency and mandatory qualifications for property managing agents in England, with feedback also sought on whether Wales should follow suit. The consultation closes on 26 September 2025.
Small Steps Already in Force
Some reforms have already been implemented. The NRLA highlights changes such as scrapping the ‘two-year rule’ for lease extensions and freehold purchases, expanding eligibility for Right to Manage, and ending automatic liability for freeholders’ legal fees — all measures that boost leaseholder rights and reduce costs.
Reform Still in Sight — But on Whose Timeline?
The NRLA recalls that Housing Minister Matthew Pennycook had promised to consult on new valuation rates for lease extensions by summer 2025 and to introduce a draft Leasehold and Commonhold Reform Bill later in the year. That Bill is also set to advance Law Commission recommendations to revive commonhold ownership and place fresh restrictions on leasehold flats.
However, with the court’s decision looming large, the NRLA warns that the pace — and even the scope — of change will depend heavily on the outcome. For landlords, leaseholders and the property industry alike, the next few weeks could determine whether Britain’s leasehold shake-up finally moves forward or gets stuck in legal quicksand.