Leasehold Reform 2026 — What Flat Owners Need to Know
Leasehold reform has been promised by three successive governments. Some is now law. Some is in law but not yet in force. Some is proposed but not yet law at all. If you own a leasehold flat in England or Wales, the distinction matters. Here is what has changed, what is coming, and what is genuinely uncertain.
| Reform | Status |
|---|---|
| Ground rent: peppercorn on new leases from June 2022 | ✅ In force |
| Right to extend lease immediately on purchase | ✅ In force (Feb 2025) |
| Lease extension term raised to 990 years | In law — secondary legislation needed |
| Marriage value abolition | In law — valuation rates and secondary legislation needed |
| Ground rent restrictions for existing leases | Proposed — subject to consultation and legislation |
| Proposed ban on sale of most new flats as leasehold | Proposed — not yet law |
| Abolition of forfeiture | Proposed — not yet law |
| New commonhold conversion process | Proposed — not yet law |
The scale of what this affects
There are approximately five million leasehold properties in England and Wales. Almost all flats are sold leasehold — compared to 7% of houses. A leasehold flat owner does not own the building or the land beneath it; they own the right to occupy their flat for the duration of a lease, which can be 99, 125 or 999 years. (Source: House of Commons Library CBP-10653, June 2026.)
The problems that have accumulated are well documented in Parliament: ground rents that have doubled periodically; service charges with limited transparency; the disproportionate cost of extending a lease where it has fallen below the 80-year threshold; and forfeiture — a legal mechanism that critics argue allows landlords ultimately to terminate a lease over debts that are disproportionately small relative to the asset at stake. Existing law restricts forfeiture for small debts and requires procedural steps including tribunal and court processes, but the parliamentary view is that the potential loss of a lease is disproportionate to the sums sometimes in dispute. (Source: House of Commons Library CBP-10918, July 2026; HCLG Committee pre-legislative scrutiny report, 27 May 2026.)
What the Leasehold and Freehold Reform Act 2024 does — and where it is now
The Leasehold and Freehold Reform Act 2024 received Royal Assent in May 2024. Most of its provisions require secondary legislation before they take effect.
Already in force
From February 2025, the previous two-year ownership requirement was removed for statutory lease extensions and qualifying freehold acquisition claims. Flat owners can therefore exercise statutory lease-extension rights immediately after purchase, subject to the relevant eligibility requirements. (Source: House of Commons Library CBP-10653, citing MHCLG, January 2025.)
In law, but not yet in force
Marriage value abolition. Under the current statutory valuation rules, marriage value becomes part of the premium calculation where a lease has fewer than 80 years remaining, and can materially increase the premium payable for a statutory lease extension. The Leasehold and Freehold Reform Act 2024 removes marriage value from the valuation calculation — but this requires secondary legislation setting out new valuation rates before it takes effect.
The government's consultation on those rates was delayed by legal challenges from freeholder groups. The High Court dismissed those challenges on 24 October 2025. Five groups of freeholders subsequently obtained permission to appeal. That appeal has not yet been determined. The government says it expects to consult on the valuation rates in 2026, with secondary legislation to follow. (Source: House of Commons Library CBP-10653, June 2026.)
990-year lease extension term. The Act increases the standard statutory lease extension term for flats to 990 years. This also requires secondary legislation before it takes effect. (Source: House of Commons Library CBP-10653, June 2026.)
What the Draft Commonhold and Leasehold Reform Bill proposes
The government published the Draft Commonhold and Leasehold Reform Bill on 27 January 2026 for pre-legislative scrutiny. The Housing, Communities and Local Government Committee published its scrutiny report on 27 May 2026. The King's Speech on 13 May 2026 confirmed that the government will bring forward a Commonhold and Leasehold Reform Bill in the 2026-27 parliamentary session. The government is considering the Committee's recommendations before introducing the final Bill. (Sources: Hansard, 27 January 2026; King's Speech 2026; HCLG Committee report, 27 May 2026; House of Commons Library CBP-10918, July 2026.)
1. Restrictions on ground rents for existing leases
The draft Bill proposes to restrict ground rents on existing residential leases. The proposal, set out in the draft Bill and the associated government consultation ("Modern leasehold: restricting ground rent for existing leases"), is a cap of £250 per year, reducing to a peppercorn 40 years after the legislation commences. The final policy design remains subject to the consultation process and parliamentary scrutiny. The government estimates restricting ground rents could save many leaseholders more than £4,000 over the life of their lease. (Source: gov.uk, "Modern leasehold: restricting ground rent for existing leases"; Hansard, 27 January 2026; House of Commons Library CBP-10653, citing MHCLG.)
Ground rent on new leases granted from 30 June 2022 is already capped at peppercorn under the Leasehold Reform (Ground Rent) Act 2022. Restrictions on existing leases are a separate, later measure.
2. Proposed ban on the sale of most new flats as leasehold
The draft Bill proposes that commonhold becomes the default tenure for most new residential flat developments. The government's consultation — "Moving to Commonhold" — sought views on the scope, exemptions and transitional arrangements. The consultation closed on 24 April 2026. Certain categories may be excluded; the final scope will be determined through the legislative process. (Source: gov.uk, "Moving to Commonhold" consultation; House of Commons Library CBP-10653.)
3. Abolition of forfeiture
The draft Bill proposes to abolish forfeiture as a means of enforcing lease compliance and replace it with a court-led enforcement process. (Source: Hansard, 27 January 2026; HCLG Committee report, 27 May 2026.)
4. New process for conversion to commonhold
The draft Bill proposes new routes for existing leasehold buildings to convert to commonhold, including mechanisms linked to collective enfranchisement. The government stated in Parliament on 27 January 2026 that the process would make conversion possible when at least 50% of qualifying leaseholders agree. The interaction between enfranchisement rights, commonhold conversion and non-consenting leaseholders involves technical complexity that the final legislation will need to address. (Source: Hansard, 27 January 2026; HCLG Committee report, 27 May 2026.)
What commonhold actually means
Commonhold is a form of property ownership in which each flat owner holds a freehold title to their individual unit. The building structure, exterior and shared areas are owned and managed jointly by all flat owners through a commonhold association. There is no external landlord, no ground rent, and no expiring term. Commonhold has existed in English law since 2002 but has been used for fewer than 20 developments — because of structural problems in the original legislation and the absence of regulatory pressure on developers to adopt it. The draft Bill addresses those structural problems directly. (Source: House of Commons Library CBP-10918, July 2026, citing Law Commission report, 2020.)
The timeline — confirmed positions only
| When | Current position |
|---|---|
| 27 Jan 2026 | Draft Bill published for pre-legislative scrutiny |
| 13 May 2026 | King's Speech confirmed Bill in 2026-27 parliamentary session |
| 27 May 2026 | HCLG Committee published scrutiny report with recommendations |
| 2026 | Government considering recommendations; expects to consult on valuation rates |
| Later 2026 | Final Bill expected to be introduced, subject to government timetable |
| After introduction | Parliamentary scrutiny, amendments and passage |
| After Royal Assent | Commencement dates and secondary legislation determine when reforms take effect |
What this means depending on your situation
This section explains the legislative landscape. It is not advice about what you should do. Speak to a solicitor specialising in leasehold property before making any decision.
The "wait or extend" question
The question of whether to extend a lease now under current rules, or wait for reforms not yet in force, is one of the most frequently asked in leasehold property. There is no universal answer. It depends on your specific lease length, ground rent terms, the premium under current valuation rules, how close the lease is to the 80-year threshold, and your circumstances — including whether you need to sell or remortgage within a particular timeframe. BritSavvy cannot advise on this decision. Speak to a solicitor who specialises in leasehold enfranchisement. The Leasehold Advisory Service (LEASE) provides free, government-funded guidance at lease-advice.org.