Leasehold Reform in England and Wales: What Is Changing for Flat Owners, Ground Rents, Service Charges and Commonhold?

If you own a leasehold flat and have absorbed the headlines over the past couple of years — ground rent capped, marriage value abolished, commonhold on the way — you’d be forgiven for assuming leasehold has already been substantially reformed. It hasn’t, not yet, and the gap between what’s been announced, what’s already on the statute book and what’s actually enforceable today is the single most important thing for an existing leaseholder to understand.

This isn’t a history of leasehold law. It’s a snapshot of where the reform genuinely stands, item by item, and what that means if you’re making a decision about a lease now rather than several years from now.

Last checked: 14 September 2026.

The three-layer picture

Leasehold reform in England and Wales currently sits across three distinct layers, and conflating them is where most of the confusion comes from. First, there is legislation already fully in force, most notably the Leasehold Reform (Ground Rent) Act 2022. Second, there is the Leasehold and Freehold Reform Act 2024, which received Royal Assent in May 2024 and contains some of the most important reforms leaseholders have been promised, but where the House of Commons Library’s current implementation briefing remains clear that the majority of provisions are not yet in force. Some need secondary legislation, some require consultation, and the government has confirmed that technical defects in the Act need correcting through further primary legislation before the main lease-extension and freehold-purchase reforms can operate.

Third, there is the draft Commonhold and Leasehold Reform Bill, published in January 2026. It has completed pre-legislative scrutiny, but at the point this article was last checked the final Bill had not yet been introduced to Parliament. Measures contained in it are therefore proposals rather than rights an individual leaseholder can use today.

That distinction — what is already in force, what Parliament has passed but has not yet commenced, and what is still proposed — is the safest way to read almost every leasehold-reform headline.

What’s already changed: ground rent on new leases

The 2022 Act is the clearest settled part of this picture. For most new long residential leases granted in England and Wales on or after 30 June 2022, the permitted ground rent is a peppercorn — effectively zero. Retirement properties came into the regime later, from April 2023. The current position and exceptions are set out in the government’s Leasehold Reform (Ground Rent) Act guidance.

Crucially, buying an existing lease after June 2022 does not turn it into a new lease for these purposes. If the lease itself was granted before the Act took effect and contains an existing ground-rent obligation, that ground rent normally continues according to the lease. Somebody buying a resale flat in 2026 can therefore still legitimately inherit a £250, £400 or escalating annual ground rent even though new leases next door may carry none. What matters is when the lease was granted, not simply when the current owner bought the flat.

What’s already changed: buying the freehold or extending sooner

One specific reform from the 2024 Act is genuinely live. Leaseholders no longer have to own a property for two years before starting a statutory lease-extension claim or, where the qualifying rules are met, exercising certain enfranchisement rights. That ownership restriction was removed from 31 January 2025, so a buyer no longer has to sit through a two-year wait simply because they purchased a lease that already needed attention.

Right to Manage has also become more accessible. From March 2025, the permitted proportion of non-residential floor space in a building increased from 25% to 50% for Right to Manage claims, bringing more mixed-use blocks — flats above shops, for example — within reach of the process. Leaseholders making a standard Right to Manage claim are also generally no longer responsible for the landlord’s costs in the way they were previously.

There is an important distinction here because the reform headlines can make the two processes sound interchangeable. The 2024 Act also legislates for the commercial-space threshold for collective enfranchisement — leaseholders buying their building’s freehold together — to rise from 25% to 50%, but that separate provision has not yet been commenced. The government intends to bring it into force alongside the wider enfranchisement reforms once the technical problems in the 2024 Act have been corrected. So the 50% threshold is already relevant to Right to Manage; it is not yet the operative threshold for collectively buying the freehold.

What’s passed into law but not yet in force: the biggest financial changes

This is where existing leaseholders most often get the wrong impression, because these are the measures that generated the loudest headlines.

Abolition of marriage value. Marriage value can substantially increase the price of a statutory lease extension once a lease has 80 years or fewer remaining. The 2024 Act provides for it to be removed from the future valuation calculation, but that abolition is not yet operating. The replacement calculation also depends on technical deferment and capitalisation rates which the government is currently consulting on, with the leasehold enfranchisement valuation consultation now due to close on 21 October 2026. The government has also confirmed that technical defects in the 2024 Act have to be corrected through the forthcoming Commonhold and Leasehold Reform Bill before the new valuation system can be commenced. For somebody extending a lease today, marriage value therefore remains part of the current statutory calculation where the existing rules require it.

A standard 990-year lease extension. The 2024 Act provides for statutory extensions of both flats and houses to move to a 990-year additional term, with a peppercorn ground rent. That reform is not yet in force either. A qualifying flat leaseholder starting a statutory extension now still uses the existing system rather than receiving the promised 990-year term.

Changing who pays the freeholder’s costs. The Act is also intended to reverse much of the existing position under which leaseholders bringing statutory enfranchisement claims can be required to pay specified legal and valuation costs incurred by their landlord. Again, that new regime is not yet operating. The government’s plain-English explanation of the forthcoming lease-extension reforms is unusually useful here because it states the position plainly: the reforms are intended to make extensions and freehold purchases cheaper and easier, but they cannot yet be brought fully into force until the remaining technical work and legislation are completed.

The 2024 Act also goes beyond traditional leasehold. Many owners of newer freehold houses pay private estate-management charges for roads, landscaping, drainage or communal areas without having the same statutory protections leaseholders have over service charges. The Act creates a framework intended to give those homeowners more information and a route to challenge unreasonable charges, but those rights are not yet operating. The government has consulted on the implementation arrangements, including standardised information and enforcement protections, without yet confirming a commencement date.

Service-charge and insurance reform is further advanced, particularly in England. The government published its detailed implementation response on 15 July 2026, confirming standardised service-charge demand forms, annual reports covering the condition of the building and future major works, more consistent service-charge accounts, stronger information rights and a move away from opaque insurance commissions towards transparent permitted insurance fees. The full detail is set out in the government’s response on strengthening leaseholder protections over charges and services.

In England, leaseholders are expected to start seeing these changes from 2027, with different lead-in periods for different requirements. The July 2026 implementation response is specifically for England, however, even though parts of the underlying 2024 Act extend across England and Wales, so Welsh leaseholders should not assume that every part of the English timetable will apply in Wales on exactly the same date.

It is also worth keeping the purpose of this reform in perspective. Clearer service-charge paperwork should make it easier to understand a bill, identify forthcoming major works and challenge unreasonable costs or opaque insurance arrangements; it does not make the underlying cost of maintaining a building disappear. An £80,000 roof repair does not become a £40,000 repair simply because the demand explaining it is better drafted. The gain is transparency and accountability rather than an automatic reduction in every legitimate service charge.

What’s still just a draft Bill: the biggest remaining questions

This is the layer most likely to be reported as though it were already settled law. The draft Commonhold and Leasehold Reform Bill was published on 27 January 2026 and scrutinised by the Housing, Communities and Local Government Committee, which reported in May. The government has said a substantive Bill will follow, but at the point this article was last checked on 14 September 2026 it had not yet been introduced.

Its most significant proposals for existing leaseholders include a cap on qualifying ground rents in older leases of £250 a year across England and Wales, eventually reducing to a peppercorn after a 40-year transition; replacement of the existing law of forfeiture with a more proportionate enforcement regime; and a new route intended to make conversion of existing leasehold developments to commonhold more realistic. For future buyers, the biggest proposed change is a restriction on the sale of most new leasehold flats, with commonhold intended to become the normal ownership structure for new apartment developments.

Those are proposals rather than enforceable rights. The government’s January 2026 indicative timetable suggested that, subject to Parliament, the £250 ground-rent cap could take effect around late 2028. No similarly firm commencement date has been settled for the proposed restriction on new leasehold flats, and its scope, exemptions and transitional arrangements remain part of the legislative process. One point is worth correcting because different figures have circulated during the reform debate: the current proposal is a £250 cap for qualifying existing ground rents in both England and Wales, not a separate £100 Welsh cap.

There is also continuing litigation around parts of the 2024 Act’s enfranchisement reforms. Groups representing freeholders and ground-rent investors challenged measures including the abolition of marriage value and changes to the valuation treatment of ground rents. The High Court dismissed those challenges on 24 October 2025, but the Court of Appeal has subsequently granted permission to several claimant groups to appeal. The government says it is defending the appeal while continuing its implementation work. This has not suspended the 2024 Act or established that the reforms will be overturned, but it adds another layer of uncertainty for anyone trying to predict the exact future cost of a lease extension before the final valuation system is in place.

Does this mean my existing ground rent will disappear?

For most leaseholders with a lease granted before the 2022 Act took effect, the honest answer remains: not yet.

If the lease currently requires ground rent, that contractual obligation generally continues. The proposed £250 cap would change the position for many older leases if the final legislation passes and is commenced broadly in its present form, but it would cap what can be demanded rather than increase lower rents to £250, and after the proposed 40-year period the cap would fall to a peppercorn.

It does not currently entitle a leaseholder paying £500 a year to reduce the next payment to £250, nor would the proposal create a retrospective refund for ground rent already paid. Until the law actually changes, the lease remains the starting point.

Commonhold, in plain terms

Commonhold is an alternative form of ownership for blocks of flats and other shared developments. Instead of owning a lease that runs down over time beneath a separate freeholder, a commonhold owner holds the freehold of their individual unit while the shared parts of the development are managed collectively through a commonhold association.

The concept itself isn’t new. Commonhold has existed in England and Wales since 2002, but it has never become mainstream. The government’s Commonhold White Paper says fewer than 20 commonhold developments, containing fewer than 200 units, have been created. The reasons include limitations in the original legal framework, difficulties accommodating complex and mixed-use developments, and a property market in which developers, lenders and conveyancers became accustomed to leasehold.

The current reform programme is intended to rebuild that framework so commonhold can become a workable mainstream alternative rather than a legal curiosity. It would remove the wasting-lease problem and the separate freeholder sitting above individual flat owners, but it does not remove the cost or difficulty of managing a building. Roofs still need repairing, buildings still need insuring, reserve funds still need funding and owners still need a workable way of making collective decisions. Commonhold changes the ownership and control structure; it does not abolish building management.

For existing buildings, conversion is currently difficult because the existing commonhold framework requires a level of agreement that has proved impractical for most ordinary blocks. The draft 2026 Bill proposes a substantially different route under which conversion could proceed where at least 50% of qualifying leaseholders agree, alongside a mechanism intended to protect the interests of non-participating owners and other parties. That is potentially important because commonhold reform is no longer being framed only as a solution for future new-build flats, but it remains a proposal. An existing block cannot today hold a 51% vote and compel conversion under those draft rules.

Does uncertainty affect selling or mortgaging?

Yes, although not because every leasehold flat has suddenly become unmortgageable while reform is pending. Buyers and lenders still assess the lease actually attached to the property: how many years remain, what ground rent is payable and how it changes, what service charges have actually been demanded, whether major works are expected and whether there are unresolved building-safety issues. Future reform may alter some of those economics later, but it does not rewrite the lease before the relevant legislation commences.

That makes ordinary leasehold due diligence as important during the transition as it was before it. Someone buying a flat now should establish the remaining lease term, the ground-rent amount and review mechanism, recent service-charge history, whether there is a reserve or sinking fund, whether major works are planned or already being consulted on, and whether cladding, fire-safety or other building-safety problems remain unresolved. The Leasehold Advisory Service’s guide to buying a leasehold flat sets out the kinds of issues a buyer and conveyancer should investigate before committing.

The fact that reform is coming should not become a reason to price an unattractive lease as though those problems have already been solved. A future ground-rent cap may improve an onerous rent clause; a future lease-extension regime may make extending cheaper; and a future commonhold conversion process may eventually give owners greater control. None of that changes the service-charge history, remaining lease length or major-works liability attached to the property on completion day.

The same caution applies to existing leaseholders deciding whether to extend. Someone with a very long lease and no immediate plans to sell may reasonably choose to wait and see what the new valuation regime eventually looks like. Someone close to the 80-year threshold faces a more difficult calculation, because marriage value remains relevant under today’s rules once the lease has 80 years or fewer remaining when the statutory claim is started. The independent Leasehold Advisory Service’s current guidance on whether to wait or extend therefore advises leaseholders near that point to consider their own circumstances rather than simply assume reform will arrive first.

A leaseholder with 78 years remaining may ultimately benefit significantly if abolition of marriage value is commenced, but is waiting for a system whose implementation date and final valuation assumptions are still unsettled. Someone with 81 years remaining faces the opposite risk: waiting for a cheaper future regime could allow the lease to fall through the existing 80-year threshold before that regime is operating. A planned sale or remortgage can make the decision more urgent again, because the buyer and lender have to assess the lease that exists now.

There is therefore no universally correct answer to whether a leaseholder should extend now or wait. Remaining lease length, current ground rent, the likelihood of selling or refinancing and the ability to fund an extension under today’s system all matter.

What to actually monitor

For an existing leaseholder, the practical position in September 2026 is less dramatic than some of the headlines suggest, but considerably clearer once the reforms are separated by legal status.

Ground rent on most older leases remains payable under the existing lease. The two-year ownership rule for statutory lease-extension claims has gone, and Right to Manage has already been widened. But the promised 990-year extension, abolition of marriage value, new valuation method and wider enfranchisement cost reforms are not yet operating.

In England, the direction of travel on service-charge and insurance transparency is now much clearer, with implementation expected to begin from 2027, but the new forms and reporting duties are not yet what most leaseholders receive today. The proposed £250 ground-rent cap, replacement of forfeiture, easier commonhold conversion and restriction on most new leasehold flats remain dependent on the forthcoming Commonhold and Leasehold Reform Bill passing Parliament and the relevant measures subsequently being commenced.

For anyone facing a real decision now, the safest approach is therefore to work from the rights and liabilities that exist now rather than the ones expected later. A service-charge dispute should be judged under today’s service-charge rules; a flat being bought should be assessed on today’s lease; and a lease-extension decision around the 80-year point should be made with full awareness that the cheaper future system has been legislated for in part but is not yet available.

When a headline says that a leasehold reform has been announced, confirmed or even passed, there is still one further question worth asking before acting on it: has the relevant provision actually come into force?

This article provides general information about leasehold and commonhold reform in England and Wales and is not personalised legal, valuation, mortgage or investment advice. Several measures discussed have been enacted but are not yet in force, while others remain proposals in draft legislation. Timetables, commencement arrangements and final policy details can change. Before making a significant decision about extending a lease, buying a freehold, purchasing a leasehold property or converting to commonhold, check the current law and, where appropriate, obtain advice from a solicitor or specialist leasehold adviser.