Leasehold reform remains one of the most significant housing policy changes in England and Wales, and 2026 is set to be a pivotal year for leaseholders, landlords and developers.
The UK’s leasehold system has faced years of criticism for unfair ground rents, rising service charges, and limited control for homeowners. While earlier legislation began addressing these concerns, 2026 marks the point where we should start seeing the impact of those changes, as well as the secondary legislation required to allow full implementation.
For many leaseholders, this will be the first time reforms translate into visible savings, increased control, and being able to choose how their homes are owned and managed.
The Leasehold and Freehold Reform Act received Royal Assent on 24 May 2024. Since then, various changes have already been implemented, including:
- Leaseholders now have the right to extend their lease and buy their freehold immediately, rather than having to wait two years
- Leaseholders in mixed-use buildings are now allowed to exercise their Right to Manage
- When bringing a Right to Manage claim, leaseholders are no longer required to cover the freeholder’s legal fees
These early changes were put in place to remove some of the core barriers that stopped leaseholders from taking action, particularly the cost and delay that historically worked in favour of landlords.
In 2025, a judicial review was requested challenging parts of the Act, including the abolition of marriage value and new restrictions on legal costs. In October 2025, the High Court dismissed the challenge, allowing the Government to continue with the implementation of the reforms.This ruling was significant, as it removed a major source of uncertainty and confirmed the Government’s ability to push ahead with the next phase of reform.
This guide breaks down what’s changing in 2026, what’s already in force, and what leaseholders should be preparing for next.
Draft Leasehold and Commonhold Reform Bill published January 2026
Published in early 2026, the Draft Bill represents the next major legislative step. Although still subject to consultation and potential amendment, it sets out the Government’s longer-term plans for ending unfair leasehold practices and accelerating the transition to alternative ownership models.
While not yet law, the Draft Bill gives a clear indication of the direction the Government is taking and allows leaseholders, landlords and developers to start planning for what’s coming.
The proposed new measures include:
Capping ground rents
The new Bill proposes to cap ground rents at £250 a year, reducing to a peppercorn rent (i.e. £0) after 40 years. This would bring relief to leaseholders facing escalating ground rents, particularly those caught by doubling clauses that have made properties harder to sell or remortgage.
Banning new leasehold flats (with limited exceptions)
Instead of leasehold, new flats will generally be sold as commonhold. This marks a major shift away from the traditional leasehold model and aims to prevent future buyers from inheriting the same problems faced by existing leaseholders.
Making it easier and cheaper to extend leases or buy the freehold
The removal of the requirement to pay marriage value should significantly reduce the cost of extending a lease. (Marriage value is the increase in the flat’s market value that results from extending the lease, which currently has to be paid to the freeholder.)
For leaseholders with shorter leases, this change could result in large savings and may encourage earlier action rather than waiting until a lease becomes problematic.
Making conversion to commonhold easier
The Bill aims to simplify the legal and procedural hurdles that have historically made commonhold conversion difficult, expensive and unattractive.
Abolishing forfeiture for minor arrears
This is intended to provide greater security and proportionality, ensuring that minor disputes or short-term arrears do not carry such large consequences as losing your property over what could be small amounts.
Ending ‘fleecehold’
Ending what has become known as ‘fleecehold’, where someone owns the freehold but the property is located on a privately managed estate (common with new-build developments). These properties are often liable for additional fees for the upkeep of communal areas.
The proposed changes aim to improve transparency, limit unreasonable charges, and give homeowners greater rights when dealing with estate management companies.
Moving towards commonhold ownership
A central goal of leasehold reform is to replace leasehold with commonhold as the default ownership model for flats.
Commonhold is not a new concept and is widely used in other countries. It was introduced in the UK under the Commonhold and Leasehold Reform Act 2002. However, since then, only around 20 commonhold developments have been recorded.
Low take-up has largely been due to complicated processes, lack of lender confidence, and the difficulty of converting existing leasehold buildings.
Benefits of commonhold
- Homeowners own their property outright, with no landlord
- Residents collectively manage and control their building, owning both the building and the land it sits on
- Greater transparency around service charges and maintenance costs
- No ground rent and no diminishing lease term
In 2026, leasehold reforms are focused on removing barriers to commonhold, particularly for existing buildings where conversion previously required 100% of leaseholders to agree. The reforms propose to reduce this threshold to 50%. If implemented, this could unlock commonhold for many blocks that were previously unable to convert due to a small number of owners who did not want to change from leasehold.
What leaseholders should do in 2026
If you own a leasehold property, 2026 is a crucial time to review your position.
You may want to:
- Check whether your ground rent will be affected by the proposed cap
- Consider whether a lease extension or freehold purchase is now more affordable
- Explore Right to Manage or commonhold conversion with other residents
- Seek professional advice before making decisions, as reforms are being phased in
Leasehold reform in 2026 represents a fundamental shift in the balance of power towards homeowners. Whilst changes will take time to fully materialise, the direction is clear: fewer unfair costs, stronger rights, and a gradual move away from leasehold altogether.
For leaseholders, landlords and property professionals alike, staying informed in 2026 is essential — because the way residential property is owned and managed in England and Wales is changing for good.
