Leasehold reform 2026: what has changed, what has not

Leasehold reform has been back in the news this year. The government confirmed in the King's Speech on 13th May 2026 that it will press ahead with a Commonhold and Leasehold Reform Bill, building on a draft version published on 27th January 2026. If you own a leasehold flat, or you are thinking about buying one, it is easy to lose track of what has actually become law and what is still only a proposal. Here is where things really stand.

What leasehold actually means

Most flats in England and Wales are sold as leasehold rather than freehold. You own the right to live in the property for a fixed number of years, but a separate freeholder owns the building and the land it sits on. The freeholder, or a managing agent acting for them, is usually responsible for the structure, communal areas and buildings insurance, paid for through service charges and sometimes ground rent.

It is a system that works fine when freeholders manage well and charge fairly. The problem successive governments have tried to fix is what happens when they do not: opaque service charges, ground rents that escalate over time, and lease extensions that can cost tens of thousands of pounds.

What has already changed

The Leasehold and Freehold Reform Act 2024 became law in mid-2024, but most of it needed separate regulations before it could actually take effect. Two changes are live now.

1. No more two-year wait: since 31st January 2025, you no longer need to have owned your flat for two years before you can apply to extend your lease or buy a share of the freehold. You can apply from day one of ownership.
2. Easier right to manage: since 3rd March 2025, buildings with up to 50% non-residential floor space (shops or offices below flats, for example) can qualify for the right to manage, up from 25% previously. More leaseholders in mixed-use blocks can now take over management of their building from the freeholder.

That is it so far. The changes most leaseholders are waiting for, cheaper lease extensions, the end of marriage value, and a ban on ground rent on new long leases, were all part of the 2024 Act but were never brought into force. In January 2026, the government confirmed it will deliver those changes through the new Bill instead.

What is still just a proposal

The draft Commonhold and Leasehold Reform Bill, published on 27th January 2026, is currently going through pre-legislative scrutiny in Parliament. None of the following is law yet.

1. A cap on ground rent: existing ground rents would be capped at £250 a year, falling to a peppercorn (effectively nil) 40 years after the cap takes effect. The government is aiming for this to start in late 2028, subject to Parliament's approval.
2. Commonhold as the default: new flats would be sold as commonhold rather than leasehold, meaning owners jointly own and manage the building with no freeholder in the picture at all. A consultation on how to ban new leasehold flats closed on 24th April 2026.
3. Cheaper, longer lease extensions: the Bill carries over the 2024 Act's plan to extend leases by 990 years and remove marriage value from the valuation, which should reduce the cost of extending a short lease.
4. Tighter rules on estate charges: a separate consultation on estate management charges, paid by owners on freehold estates with shared facilities, closed on 12th March 2026, with secondary legislation expected to follow.

The housing minister has been candid that the headline change, banning new leasehold flats outright, is unlikely to switch on within this Parliament. The principle has been agreed, but the timeline is genuinely open.

Key dates at a glance

1. 31st January 2025: two-year ownership rule for lease extensions removed
2. 3rd March 2025: right to manage threshold raised to 50% non-residential space
3. 27th January 2026: draft Commonhold and Leasehold Reform Bill published
4. 12th March 2026: estate management charges consultation closed
5. 24th April 2026: consultation on banning new leasehold flats closed
6. 13th May 2026: King's Speech confirmed the Bill will be brought forward
7. Late 2028 (proposed): ground rent cap targeted to take effect

What this means if you own a leasehold flat

If your ground rent is already above £250 a year, the proposed cap will not help you today. It is not yet law, and even once it is, it will only apply from whenever the cap commences, expected to be late 2028 at the earliest. Keep paying what your lease requires in the meantime, and avoid falling into arrears, since forfeiture (though also under review) still exists as a remedy for unpaid ground rent.

If you have been putting off extending your lease, the case for waiting is weaker than it looks. The cheaper valuation rules are not guaranteed, and have already faced one unsuccessful legal challenge from freeholders. If your lease is getting short, particularly under 80 years, talk to a solicitor about your options now rather than betting on a future discount that may take years to arrive.

What this means if you are buying or selling a leasehold flat

Buyers should still ask the standard questions: how many years are left on the lease, what is the ground rent and does it increase, and what has the service charge looked like over the last three years. None of that has changed, and none of it will become irrelevant overnight even if the Bill passes.

Sellers of leasehold flats may find buyers and their solicitors asking more pointed questions about ground rent and lease length than they did a couple of years ago, simply because reform has raised awareness. Having clear answers ready, and a recent lease extension valuation if relevant, will make the sale go more smoothly.

The bottom line

Two real, working changes have arrived: no more two-year wait to extend your lease, and an easier path to the right to manage in mixed-use buildings. Everything else, the ground rent cap, the ban on new leasehold flats, and cheaper extensions, is still in the pipeline and worth watching rather than relying on. We will keep this guide updated as the Bill progresses through Parliament.

Thinking of selling a leasehold flat, or buying your next one? Our team can help you get a clear, fair valuation and handle the process from listing to completion.

Sell your home: https://www.moovehub.co.uk/sell