The Government is proposing major changes to the leasehold system, including reforms to commonhold, ground rents and lease enforcement. Here is what property owners need to know.
Leasehold reform is moving towards another major milestone.
The Government intends to introduce a Commonhold and Leasehold Reform Bill during the current parliamentary session. The draft legislation, published in January 2026, proposes significant changes to how residential property is owned and managed in England and Wales.
The proposals include making commonhold the default for most new flats, capping certain ground rents, making it easier to convert existing buildings to commonhold and abolishing leasehold forfeiture.
However, these proposals are not all law yet. The draft Bill has undergone pre-legislative scrutiny, and the final legislation and implementation timetable are still to come.
Commonhold could become the default for new flats
One of the biggest proposed changes is a move away from leasehold ownership for most new flats.
The draft Bill proposes banning leasehold for most new flats and making commonhold the standard form of ownership. Under commonhold, individual owners own their flats on a freehold basis while collectively managing shared areas through a commonhold association.
The proposals would also make it easier for existing leaseholders to convert buildings to commonhold where the required level of support is achieved.
For landlords buying or considering new-build flats, this could eventually mean a different ownership structure for investment properties.
Ground rents could be capped at £250
The draft Bill proposes a £250 annual cap on ground rents for existing residential leases, with the cap reducing to a peppercorn after 40 years.
The Government has also been considering how the proposed cap should apply to certain leases where higher ground rent was agreed in exchange for a lower purchase price.
The proposed cap is not currently in force. Subject to the legislative process, the Government has indicated that the ground rent provisions could come into force from late 2028.
For landlords with leasehold properties, ground rent is one of the ongoing costs that can affect the property's long-term economics.
Lease extensions and freehold purchases
The wider leasehold reform programme also includes changes to lease extensions and enfranchisement.
The Leasehold and Freehold Reform Act 2024 provides for major changes, including extending the standard lease extension term to 990 years and removing ground rent on extended leases. However, several provisions are not yet fully in force.
The Government is also developing the valuation framework that will determine how the cost of extending a lease or buying a freehold is calculated.
Landlords considering a lease extension, freehold purchase, refinancing or sale should therefore keep up with the latest implementation details.
Forfeiture could be abolished
The draft Bill also proposes abolishing leasehold forfeiture and replacing it with a new statutory lease-enforcement system.
For property owners, the practical effect will depend on the final legislation and how the new enforcement process operates.
What should landlords do now?
With many reforms still moving through Parliament, landlords should avoid making decisions based solely on proposals that could change.
Instead, use this time to get your leasehold property information organised.
Check that you know:
- How long is left on the lease
- What ground rent you pay and how it can change
- What service charges you pay
- Who manages the property and who the freeholder is
- Where your lease and key documents are stored
- What major costs or deadlines are coming up
Having this information readily available can make it easier to assess the impact of future reforms and make longer-term decisions about your property.
What happens next?
The draft Commonhold and Leasehold Reform Bill has undergone pre-legislative scrutiny by the House of Commons Housing, Communities and Local Government Committee. The Committee published its report in May 2026, followed by the Government's response during the summer.
The next major step is the introduction of the final Bill. It will then need to pass through the parliamentary process before becoming law.
For now, landlords should keep track of developments without treating proposed reforms as current law.
The final impact will depend on the legislation Parliament ultimately passes and when individual provisions come into force.
Frequently Asked Questions
Is leasehold reform law yet?
Not all of it. The Government has published a draft Commonhold and Leasehold Reform Bill, but the final legislation still needs to go through Parliament. Provisions and implementation dates may therefore change.
Will ground rent be capped at £250?
The Government has proposed a £250 annual cap for certain existing residential leases, reducing to a peppercorn after 40 years. This is proposed legislation and is not currently in force.
What should landlords with leasehold properties do now?
Start by organising your lease, ground rent and service-charge information, ownership documents and key dates. If you're considering a lease extension, freehold purchase, refinancing or sale, seek appropriate professional advice.
Does the reform affect landlords?
Potentially. The Government has said around one in four leasehold homes are in the private rented sector, meaning the reforms could affect landlords who own leasehold properties.
Where can I follow the latest changes?
Check official Government and Parliament updates for the latest legislation, consultations and implementation dates.
