Freeholders lose High Court leasehold reform challenge

Leasehold reform has taken a decisive step forward after the High Court dismissed a major legal challenge brought by a group of leading freeholders. The judgment, handed down on 24 October 2025 by Lord Justice Holgate and Mr Justice Foxton, confirms that key elements of the Leasehold and Freehold Reform Act 2024 are lawful, clearing the way for the government to move ahead with implementation.

The decision reinforces Parliament’s power to rebalance rights between leaseholders and freeholders — a move designed to make lease extensions and freehold purchases simpler, fairer, and more affordable.

If you have questions about how the reforms might affect you, our solicitors can help you understand your position and the steps to take next. The reforms are far-reaching and complex, so early advice is the best way to prepare for what’s ahead.

What the judgment confirms

The court rejected claims that the reforms unlawfully interfered with freeholders’ property rights, ruling that they were a fair and proportionate response to long-standing problems in the leasehold system.

Key aspects now confirmed include:

• The abolition of marriage value when leaseholders extend their lease or buy the freehold.
   
• A cap on ground rent when calculating premiums for lease extensions and enfranchisement.
   
• The removal of a freeholder’s automatic right to recover certain professional costs from leaseholders.

The judgment gives government the green light to bring these measures into force through secondary legislation — a process expected to take place over the coming months.

What this means for leaseholders

For leaseholders, the ruling is a significant victory. It provides legal certainty that the government’s reforms can proceed as planned, setting the stage for a fairer and more transparent system of ownership.

While the finer details will depend on forthcoming regulations, leaseholders can start preparing now. Reviewing your lease term, understanding your eligibility, and planning for likely valuation changes will put you in a strong position once the new framework comes into force.

What this means for freeholders

For freeholders, the message is clear: change is now inevitable. The existing valuation model and cost-recovery rules will not survive the transition. Reviewing portfolios, updating income forecasts, and re-evaluating enfranchisement exposure will be essential to manage financial impact.

Although some freeholders may explore further appeals, the court’s reasoning leaves little doubt about the direction of reform. The sooner you adapt to the new legal environment, the better placed you’ll be to protect long-term interests.

Next steps in implementation

Although the Act has Royal Assent, much of it is not yet in force. The government will now move to introduce the secondary legislation required to set out the detailed valuation formulae, transitional arrangements, and rules for mixed-use or shared-ownership buildings.

The process will take time. Even with the High Court’s backing, drafting and consultation are expected to extend well into 2026. Leaseholders and freeholders alike should use this period to assess their position and seek advice on timing. Acting early could mean taking advantage of the current framework before the new rules are fully operational.

Guidance from our leasehold solicitors

The High Court’s decision marks a turning point in leasehold reform. It confirms that Parliament’s programme is both lawful and moving ahead — but the practical rollout will take time. Understanding when and how the changes apply will be vital to making the most of the new system.

“Leaseholders can take reassurance from the court’s decision, but freeholders should treat it as a clear signal to prepare for change. We’re already working with clients to assess how the changes affect their properties and ensure they’re ready when the new regime takes effect,” says Jennifer Slater, head of leasehold advisory and enfranchisement.

Our solicitors act for clients across the country on complex leasehold matters, combining technical expertise with a clear, commercial approach to achieving results. Get in touch to speak with our team.