When the government passed the Leasehold and Freehold Reform Act in 2024, it marked a significant milestone—less as a final victory and more as a long-awaited shift in direction. By 2026, leaseholders have seen the system begin to loosen its grip, although the pace remains cautious.
Over the past several decades, ground rent evolved from a modest legacy charge into a financial instrument that often confused more than it clarified. Homebuyers were purchasing flats but remained contractually tethered to freeholders with little visibility and even less recourse. The act’s proposed £250 cap—and its eventual fall to zero—is strikingly symbolic. It repositions leaseholders from passive occupants to active owners.
Key Facts on Leasehold Reform and Ground Rents – UK (2026)
| Item | Description |
|---|---|
| Act Passed | Leasehold and Freehold Reform Act 2024 |
| Ground Rent Proposal | Cap at £250/year; planned reduction to £0 |
| Commonhold Reform | New leasehold flats to be banned; commonhold to become default |
| Legal Challenge | High Court rejected freeholders’ £5M judicial review in Oct 2025 |
| Lease Extension Rule Change | No 2-year wait to extend lease (active since Feb 2025) |
| Mixed-use Building Threshold | Right to Manage expanded to 50% non-residential floor space (March 2025) |
| Consultation Phase | Ended Sept 2025; focuses on service charge fairness and managing agent rules |
By introducing this cap, the government has taken a particularly beneficial step toward preventing unjustified recurring costs. While some critics warn of unintended economic consequences, the shift highlights a deeper principle: predictable and fair ownership rights.
Equally transformative is the plan to ban new leasehold flats entirely. In their place, the government wants to revive commonhold—where homeowners co-own and co-manage the property together. It’s an approach that’s incredibly versatile in theory but has struggled historically due to legal and administrative complexity.
Since February 2025, homeowners no longer need to wait two years before applying to extend their lease. That rule had, for too long, stalled progress and penalized newcomers to leasehold ownership. By removing it, the government made a small yet highly efficient fix to a longstanding barrier.
In March 2025, the Right to Manage rules were expanded to cover mixed-use buildings with up to 50% non-residential space. That means more flat owners living above shops or small businesses can now take control of how their homes are run. It’s a move that has notably improved transparency and reduced the friction between landlords and leaseholders.
One woman I spoke with in Croydon had spent five years fighting to remove her managing agent. “They billed me £900 for cleaning the front door,” she said, shaking her head. Her story isn’t rare—and it underscores how uneven the power dynamic has been. These reforms, while still being implemented, are steadily dismantling the systems that enabled such absurdities.
The abolition of forfeiture, proposed in the draft 2026 Leasehold and Commonhold Reform Bill, may be one of the most quietly radical changes. Under current rules, someone who falls behind on a £350 debt can, in extreme cases, lose their home. Removing that threat will make the leasehold system more humane and significantly reduce the risk of disproportionate consequences.
Although the act is now law, most of its clauses are awaiting formal regulation. A detailed consultation—titled “Strengthening leaseholder protections over charges and services”—closed in September 2025. The government is currently reviewing the responses. The expected outcome includes more transparent service charge structures and stricter oversight for managing agents. The impact of that could be remarkably effective in curbing exploitation.
Campaign groups, which have pushed this agenda for years, welcomed the October 2025 High Court ruling. The court rejected a £5 million judicial review by freeholders who challenged core aspects of the reforms. That decision unlocked a legislative bottleneck and signalled that the balance of power was finally shifting.
Despite these advancements, there are delays that cannot be ignored. Not all parts of the act have come into force, and leaseholders still face obstacles while the secondary legislation is being prepared. But the direction is clear—and for the first time in decades, it’s forward.
For early-stage buyers, the reforms offer long-term assurance. Young families purchasing their first home will no longer inherit a tangle of hidden fees and limited rights. The dream of homeownership becomes slightly less bureaucratic and more rooted in real autonomy.
Through strategic legal adjustments, the government is reshaping how ownership is defined in flats across England and Wales. It’s no longer enough to own bricks and mortar on paper. The experience of ownership must also feel secure, fair, and free of obscure entitlements.
In the coming years, the widespread adoption of commonhold could redefine community management in residential spaces. Owners will collaborate directly, sharing decisions and responsibilities without a distant freeholder standing in the middle. That change has the potential to be particularly innovative—allowing shared ownership to reflect shared interest, not conflict.
Since the High Court cleared the path for full implementation, leaseholders now await the final stages of reform. It won’t be fast, but it’s already more than symbolic. It’s structural, legislative, and lived.
With each clause activated and each hidden cost struck down, the leasehold model inches closer to retirement. What replaces it won’t be perfect—but it will be more equitable, and that alone makes the wait worthwhile.