1. Lease Extensions Simplified

Under the Leasehold and Freehold Reform Act 2024, leaseholders now have a statutory right to extend their lease to 990 years (up from 90 years for flats and 50 years for houses previously).

• Ground rent is reduced to zero (a peppercorn) on extension
• The process is simplified and less costly
• Fewer barriers to enfranchisement and lease extension

2. Ban on Ground Rent in New Leases

As of the Ground Rent Act 2022, new residential long leases cannot include any financial ground rent above a peppercorn. This applies to most new flats and houses.

• Reduces long-term financial liabilities
• Makes new leases fairer and easier to understand
• Encourages a shift toward more equitable forms of ownership

3. Improved Right to Manage (RTM)

The reforms aim to simplify and streamline the Right to Manage process, making it easier for leaseholders to take control of their buildings without needing to prove fault by the freeholder or managing agent.

• Applies to more building types (mixed-use, estates, etc.)
• Removes some technical legal hurdles
• More support for forming Resident Management Companies (RMCs)

4. Commonhold as a Viable Alternative

Commonhold — where flat owners own their property outright and share responsibility for communal areas — is being promoted as a future replacement for leasehold in new developments.

• Encourages long-term thinking and collective responsibility
• Avoids the pitfalls of short leases and ground rents
• Requires a complete mindset shift from traditional freehold/leasehold dynamics

Though still rare, reforms aim to make commonhold more attractive for developers, mortgage lenders, and residents alike.

The Impact on Block Management in 2025

These changes have major implications for how block managers operate and the expectations of leaseholders and freeholders.

Let’s explore the main areas of impact.

1. A Shift Toward Collaborative Governance

Leaseholders are increasingly empowered. Whether they extend their leases, set up RMCs, or exercise Right to Manage, more buildings are being run by those who live in them — not distant landlords or corporate freeholders.

What This Means for Block Managers:

• You’re now working with residents, not just for landlords
• Decision-making is often shared with resident directors
• Agents must be skilled in governance, communication, and diplomacy
• Advice must be transparent, legally sound, and in residents’ best interests

Gone are the days of managing behind closed doors. Residents expect involvement, consultation, and accountability.

2. Increased Focus on Transparency

Service charges, budgets, and major works must now be presented with complete clarity. Vague estimates or poor record-keeping are no longer tolerated.

Key expectations:

• Clear, itemised service charge breakdowns
• Open procurement processes for contractors
• Documented major works plans (with Section 20 compliance)
• Easy access to financial records and building documentation (via resident portals)

Managing agents must use modern systems to track income and expenditure and communicate openly with leaseholders — who now have greater legal recourse if they feel unfairly charged.

3. Accountability Is Non-Negotiable

With more legal rights comes more scrutiny. Leaseholders can now more easily challenge mismanagement, either through the First-tier Tribunal (Property Chamber) or by taking over management themselves.

This means:

• Poor-performing agents are more likely to be replaced
• Buildings are run more like regulated businesses
• Mistakes in lease interpretation or statutory consultation can be costly
• Directors of RMCs need reliable, compliant guidance from their agent

In 2025, managing agents must be proactive, compliant, and contractually precise — or risk losing clients to more modern and transparent competitors.

4. Need for Clarity in Legacy Leases

Many leases in older buildings are outdated, poorly written, or ambiguous — making modern management difficult.

For example:

• Some leases don’t mention modern systems like CCTV or EV charging
• Others refer to outdated laws or missing clauses on reserve funds
• Some fail to define what is communal vs. private responsibility

Block managers now play a vital role in interpreting and updating lease guidance, working with legal professionals to ensure compliance with the new regime. They must also advise RMCs and leaseholders on how to re-draft or vary leases if needed.

5. Greater Demand for Education and Guidance

Resident directors and leaseholders are being asked to take on more responsibility — but often without the background knowledge.

Managing agents must now:

• Educate RMC directors on their legal duties
• Explain lease obligations and how reforms affect them
• Support transitions from landlord-led to resident-led management
• Facilitate training and good governance

This means providing more than just maintenance and finance — agents must offer strategic guidance, governance support, and even training workshops in some cases.

The Rise of Ethical and Responsive Block Management

The new legal landscape demands a new kind of managing agent — one that’s:

• Transparent in its operations
• Resident-focused and communicative
• Tech-enabled, using portals for service charges, documents, and updates
• Legally informed and always compliant
• Collaborative, working alongside leaseholders and resident directors

In short, managing agents must evolve or be left behind.

Final Thoughts: Reform = Opportunity

While regulatory reform and leasehold changes bring challenges, they also create enormous opportunities for better housing, empowered residents, and more professional management.

For leaseholders, this is a chance to take control.
For managing agents, it’s a moment to lead the industry forward.
For developers, it’s an incentive to rethink the leasehold model entirely.