Leasehold Reform: Where Do We Currently Stand?

Leasehold reform made it into law in May 2024, as the Leasehold and Freehold Reform Act. Then most of it went quiet. A handful of measures are now live. The headline changes, including 990 year lease extensions and a new way of pricing them, are still waiting for a start date. And the government has published a second, follow-up draft law to carry on the job.

Here is where things stand as of August 2026, taken from the Act itself, its commencement regulations, and the government's Leasehold toolkit published in May 2026. The short answer to whether leasehold reform has arrived is partly. The two year ownership rule for lease extensions has gone and, in most cases, a right to manage claim no longer carries the freeholder's legal fees, but the 990 year lease extensions and the reformed premium calculation intended to cut costs are not yet in force.

Article updated: August 2026

What leasehold means

Freehold and leasehold are the two main forms of property ownership in England and Wales. When buying or investing in property it is essential to know which one you are buying.

With a freehold property, the buyer owns the property and the land it is built on outright.

With a leasehold property, the buyer owns the right to occupy the property for a stated number of years, granted by a freeholder. The term running out does not hand the home back overnight: under Schedule 10 to the Local Government and Housing Act 1989, a qualifying long residential lease continues on statutory protection at the end of its term until it is formally ended under that Schedule's notice procedure. Flats have generally always been sold on a leasehold basis. Houses can be leasehold too, although it is much less common.

Scotland does not have a leasehold system. Everything that follows is about England and Wales, with one exception: the building safety measures apply in England only. If you are new to the tenure itself, our guide to what a leasehold property is covers the basics behind these reforms. The government's Leasehold toolkit puts the scale at around 5 million leasehold homes in England and Wales, primarily flats.

Why the leasehold system is being reformed

The government's own toolkit describes the model it wants to replace as "out of date, exploitative and unproductive".

The main complaints are long-standing:

• Leaseholders pay ground rent to a freeholder. It can be a token amount, but in some modern leases it is a considerable and rising sum. The ground rent scandal of the 2010s involved new-build leases where the ground rent doubled every ten years or so.
• Leaseholders may need their freeholder's permission, often with a fee attached, before altering their own home.
• Service charges and management charges are set by a management company the freeholder chooses, and can be hard to understand or challenge.
• Extending a lease or buying the freehold, a process known as enfranchisement, can cost a substantial premium, the lump sum paid to the freeholder, plus professional fees on both sides.
• A property with a short lease can be difficult to sell or mortgage, and typically sells at a discount. Our guide to leasehold property covers why the remaining term matters so much.

From Bill to Act: how we got here

Reform has been promised for a long time. The 2017 Conservative manifesto and the housing white paper of that year both committed to it, and the first concrete change arrived with the Leasehold Reform (Ground Rent) Act 2022. Under the government's guidance on that Act, it came into force on 30 June 2022 for most new leases, and from 1 April 2023 at the earliest for retirement properties. Its effect is that "ground rent in most new leases cannot legally be for anything more than 'one peppercorn per year'", with fines of up to £30,000 for freeholders who charge more. A peppercorn rent is a token rent of no practical value. So for most new leases the ground rent problem has been dealt with, although the word most matters: the 2022 Act covers most new residential long leases, not every one.

The 2022 Act only touched new leases, though. The bigger package for existing leaseholders was the Leasehold and Freehold Reform Bill. That Bill became the Leasehold and Freehold Reform Act 2024 on 24 May 2024, when it received Royal Assent, the formal sign-off that turns a Bill into an Act.

Becoming law and taking effect are two different things. Under section 124 of the Act, only the general provisions in Part 9 started at Royal Assent, four named sections followed automatically two months later, and for everything else "The other provisions of this Act come into force on such day or days as the Secretary of State may by regulations appoint". In other words, Parliament passed the reforms and left the start dates to the government of the day. Three sets of commencement regulations, the instruments that switch individual provisions on, have been made so far, and the official record at legislation.gov.uk still notes of the Act that "There are changes that may be brought into force at a future date".

Leasehold and Freehold Reform Act 2024: what is in force now

I have watched leasehold reform being promised since the 2017 manifesto, so I now track what has actually commenced rather than what has been announced. As of August 2026, these are the live measures that matter to owners and buyers, each with the instrument that switched it on.

The two year rule has gone

This is the change most buyers notice first. The Commencement No. 2 Regulations state that "Section 27 of the Leasehold and Freehold Reform Act 2024 (removal of qualifying period before enfranchisement and extension claims) comes into force on 31st January 2025". The toolkit puts it plainly: "Leaseholders no longer need to own a leasehold property for two years before taking action." A claim to extend the lease or buy the freehold can now start as soon as a purchase has gone through exchange and completion, rather than two years later.

Right to manage covers more buildings, usually without the freeholder's legal bill

Since 3 March 2025, under the Commencement No. 3 Regulations, leaseholders in mixed use buildings can claim the right to manage where up to 50% of the floor space is non-residential, double the old 25% limit, and the toolkit confirms that "in most circumstances, leaseholders are no longer required to pay freeholder's legal fees when making an RTM claim". Right to manage lets leaseholders take over the management of their building without proving any fault with the current manager.

Building safety costs, in England only

The Act's amendments to the Building Safety Act 2022 came into force in two stages, in July 2024 under section 124 and on 31 October 2024 under the Commencement No. 1 Regulations. These building safety measures apply in England only, not in Wales. The toolkit summarises the effect: where a building has certain historical safety defects, the costs of interim measures such as waking watches, the 24 hour fire patrols posted in unsafe buildings, expert reports, and temporary accommodation for residents moved out while work is done can be recovered through remediation contribution orders. Those are tribunal orders requiring companies connected with a defective building to contribute to the cost of putting it right.

Long leases are out of the assured tenancy regime

One related fix came from a different Act. The Renters' Rights Act 2025 amended the Housing Act 1988 so that, in the toolkit's words, "From 27 December 2025, long leases (over 21 years) no longer count as assured tenancies, no matter how high the ground rent is". Before this, a long lease with a ground rent above certain levels could technically fall into the same legal regime as a private tenancy. The toolkit says the change "makes it easier for leaseholders to get finance or sell their property". That Act is mostly about renting rather than leasehold, and our guide to the national landlord register covers the landlord database it creates.

What is not yet in force

Everything below is written into the Leasehold and Freehold Reform Act 2024 but has no start date. On legislation.gov.uk each of these provisions is marked "Prospective", meaning it has never come into force.

990 year lease extensions

Section 33 replaces the current statutory extension terms, 90 years for flats and 50 years for houses, with 990 years for both. Until it is commenced, a statutory lease extension still adds 90 or 50 years. Anyone who has read that leaseholders can already claim a 990 year lease is reading ahead of the law.

The new premium calculation, including the end of marriage value

Section 37 and Schedules 4 to 6 create a new standard method for calculating the price of a lease extension or freehold purchase. Schedule 4 requires the new valuation to assume "no marriage or hope value".

Under the law that still applies today, the premium follows Schedule 13 to the Leasehold Reform, Housing and Urban Development Act 1993, the statute usually shortened to the 1993 Act. That Schedule gives the landlord a 50% share of marriage value, which is the uplift in a property's value created when a short lease is topped back up. And it draws the line every valuer plans around: "Where at the relevant date the unexpired term of the tenant's existing lease exceeds eighty years, the marriage value shall be taken to be nil". A lease with more than 80 years left escapes marriage value. One with 80 years or fewer is caught. Hope value, the other amount the new scheme excludes, is marriage value's smaller cousin: an extra amount priced in for the chance that similar deals happen in future.

The toolkit is unusually frank about why the new method is waiting: "The reforms to the amended enfranchisement scheme (purchasing a freehold or extending a lease) require the fixing of technical flaws in the LFRA before they can be implemented. The government intends to make these changes through primary legislation." The LFRA there is the toolkit's shorthand for the Leasehold and Freehold Reform Act 2024 itself. The new method also depends on valuation rates that have not been set, which is what the consultation covered below is for.

The right to buy out the ground rent

Section 48 and Schedule 10 give qualifying leaseholders the right to vary their lease so the ground rent becomes a peppercorn rent, on payment of a premium, without having to extend the lease at the same time. It is marked prospective, so no one can use it yet.

The ban on new leasehold houses

Section 1, the "Ban on grant or assignment of certain long residential leases of houses", is not in force. The toolkit explains the sequencing: "The government wants the bans on new leases of houses and new leasehold flats to work effectively together, so that once both are in effect, it will be prohibited to sell new leasehold homes in most circumstances." The flat ban sits in the draft Bill covered below, so the house ban is waiting for its partner.

Service charge, insurance and litigation cost reforms

Part 4 of the Act covers the running costs of leasehold buildings. It takes in standardised service charge demand forms, annual reports for leaseholders, rights to information, rules on insurance commissions, schedules of administration charges and new limits on litigation costs. Most of it remains prospective. Section 55 on service charge demands, for example, still has no start date. The exception is section 64, commenced on 3 March 2025 so far as it relates to right to manage costs, as the table above shows. The toolkit commits to bringing "the transparency measures in the LFRA into force as quickly as possible", and separately to commencing "new rules to stop leaseholders from being charged unfair or hidden commission fees by landlords, freeholders or property management companies".

The same waiting applies to Part 5, which for the first time regulates the estate management charges paid by freeholders on private and mixed-tenure estates: section 73 remains prospective. Freeholders in Part 5 means freehold homeowners who pay charges towards shared areas on their estate. That is the opposite side of the fence from the freeholders mentioned so far, who own the ground under leasehold homes and collect the charges.

The 2026 position: a toolkit, consultations and a draft Bill

Two things happened in 2026 that reset the picture. In January the government published the draft Commonhold and Leasehold Reform Bill for pre-legislative scrutiny, the stage where a parliamentary committee examines a draft law before it is formally introduced. The Housing, Communities and Local Government Select Committee examined it and published its report on 27 May 2026, and the government responded in July 2026. In May the government published the Leasehold toolkit, official guidance built to explain the reforms to leaseholders, freeholders and managing agents in England and Wales. The toolkit is the clearest single statement of the government's plan.

On consultations, the toolkit lists three as completed:

• one on permitted insurance fees,
• one titled Strengthening leaseholder protections over charges and services, covering service charge and insurance transparency, litigation costs and the regulation of managing agents,
• and one on how a leasehold flat ban would work.

Two more are open as of August 2026. The consultation on leasehold enfranchisement valuation rates, announced in the toolkit as "setting the rates to be used for determining the price paid for freehold purchases, lease extensions and buying out ground rent", opened on 15 July 2026 and closes on 23 September 2026. Those rates are one of the two missing pieces of the new premium calculation. The other is the primary legislation needed to fix the Act's technical flaws, which is why no one can yet say what an extension will cost under the reformed scheme.

The second open consultation covers quid pro quo leases and the ground rent cap. It opened on 2 July 2026 and closes on 27 August 2026. It asks whether leases where a higher ground rent was agreed in exchange for a lower purchase price should be exempt from the draft Bill's proposed £250 cap, and if so how an exemption would work.

What the draft Commonhold and Leasehold Reform Bill proposes

The draft Bill is a proposal, not law. Per the toolkit, it would:

• "cap existing ground rents at £250 a year, changing to a peppercorn after 40 years". The toolkit adds that "this is a cap on the maximum amount that can be charged and will not increase anyone's ground rents. Ground rents can only rise in accordance with the terms of the lease".
• Abolish the rules under which a leaseholder can lose their home over minor breaches of the lease, replacing forfeiture with what the government describes as a fairer, proportionate enforcement scheme.
• Make it easier for existing leaseholders to convert their buildings to commonhold.
• "ban the use of leasehold for most new flats", with commonhold as the default for new flats instead.

On timing, the toolkit says only that "Following consideration of feedback from the 'Moving to Commonhold' consultation and pre-legislative scrutiny of the draft Bill, the government will finalise commencement arrangements." No dates are given.

What is commonhold?

Commonhold matters because it is where the government says flat ownership is heading. The toolkit describes it as "a form of freehold ownership designed specifically for flats and shared buildings". Owners hold their property outright with no lease term or expiry date, the building is managed by a commonhold association made up of all the homeowners, decisions are voted on, and the rules live in a standard document called a Commonhold Community Statement. There is no third-party freeholder, no lease to extend and no ground rent.

Commonhold is not new on paper. The framework was created by the Commonhold and Leasehold Reform Act 2002, and the commonhold part of that Act was brought into operation by a commencement order on 27 September 2004. Two decades on it has barely been used. The draft Bill is the government's attempt to modernise the framework so it can become the default for new flats, which is why the leasehold flat ban and the commonhold reforms travel together.

What this means if you own or are buying leasehold

None of this is advice, and leasehold law has enough traps that specialist legal advice is worth its fee. But the factual position as of August 2026 breaks down cleanly.

For an owner, the ground has already shifted in three places. A lease extension or freehold purchase claim no longer needs two years of ownership. A right to manage claim is open to more buildings and, in most circumstances, no longer carries the freeholder's legal bill. And a long lease can no longer be treated as an assured tenancy, whatever the ground rent, save for transitional cases where a notice was served or court proceedings had begun before the 27 December 2025 change.

What has not changed is the money. Until the valuation reforms land, the premium for extending is still calculated under the existing law, including the landlord's 50% share of marriage value where the lease has 80 years or fewer left. Ground rent in an existing lease also remains payable as the lease sets it out, although the general law still governs how it is collected: under section 166 of the Commonhold and Leasehold Reform Act 2002 it only falls due once the landlord serves a written demand, and under section 19 of the Limitation Act 1980 arrears can only be recovered going back six years. The £250 cap is a proposal in a draft Bill, nothing more.

That gap between the current rules and the promised ones is the position every owner of a shortening lease now sits in. Extending today is priced under the current law, marriage value included once the term is at 80 years or fewer. The reformed scheme has no start date, depends on rates that are out for consultation until September 2026, and needs further primary legislation before it can begin. Meanwhile the lease keeps getting shorter, and a lease that crosses the 80 year line before a claim starts brings marriage value into the price. If a known cost today is the priority, the current rules are the only ones that can be priced. If the plan is to wait for the reformed scheme, its start date is not knowable from anything published so far.

For a buyer, the practical change is that the two year wait has gone from the calculation. In my experience short-lease flats have always traded at a discount partly because of that wait, so its removal changes how quickly a new owner can act on the lease itself. A short lease is often part of the story behind the asking price, whether that is an investment property, a buy to let property for sale or one of the below market value properties where the discount has a reason attached. And the lease length, the ground rent clause and the service charge history are still governed, for the most part, by the old law, which is why they carry the same weight in a purchase today as they did before the Act passed.

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