Leasehold Reform 2026: What the Latest Government Changes Mean for Leaseholders

If you own a leasehold flat, 2026 is a year worth paying attention to. The Government is moving forward with one of the biggest changes to the leasehold system in England and Wales in decades. But there is a lot of confusion around what has actually changed, what is contained in the Leasehold and Freehold Reform Act 2024, what is still being consulted on and what leaseholders can realistically expect next. That distinction matters.

Some reforms are already part of the law but require further regulations before they can operate fully. Other measures are contained in the Government’s draft Commonhold and Leasehold Reform Bill, while some proposals are still at the consultation stage. The Government’s own leasehold toolkit, published in May 2026, brings together the changes introduced through the 2024 Act, the draft legislation and the future reforms being developed.

So, if you are a leaseholder wondering “What does leasehold reform 2026 actually mean for me?”, here is where things currently stand.

What Is Leasehold Reform 2026?

Leasehold reform 2026 is not one single law. It is a collection of reforms being introduced or developed to change how leasehold property ownership works in England and Wales. The changes cover areas including:

• Lease extensions
• Buying the freehold
• Ground rents
• Service charges
• Managing agents
• Right to Manage
• Commonhold
• Legal costs
• Forfeiture
• Leasehold enfranchisement

The Government published a draft Commonhold and Leasehold Reform Bill in January 2026. It proposes to make commonhold the default for most new flats, make conversion from leasehold to commonhold easier and introduce further protections for existing leaseholders. 

What Is the Leasehold and Freehold Reform Act 2024?

The Leasehold and Freehold Reform Act 2024 is the foundation for several major changes affecting leaseholders. Among other measures, the Act provides for:

• Longer statutory lease extensions
• Changes to enfranchisement valuation
• Removal of the two-year ownership requirement for certain claims
• Changes to the non-residential limit for collective enfranchisement and Right to Manage
• Greater transparency around service charges
• Changes to building insurance information
• Changes to legal costs in leasehold disputes

The Act provides for the standard statutory lease extension to increase from 90 years to 990 years for houses and flats, with ground rent reduced to a peppercorn. It also removes the previous two-year ownership requirement for certain lease extension and freehold claims.  However, some of these reforms require secondary legislation before they can fully operate. That is one of the most important points to understand when reading about leasehold reform changes 2026.

Lease Extensions: Could Extending Your Lease Become Cheaper?

This is one of the reforms most likely to attract attention from flat owners. Under the 2024 Act, the Government is introducing a new approach to statutory lease extension and freehold acquisition valuations. The legislation provides for a Standard Valuation Method and removes marriage value from the calculation. It also limits the treatment of ground rent in the valuation calculation to 0.1% of the freehold value and gives the Government power to prescribe the valuation rates used. 

On 15 July 2026, the Government launched a consultation on the valuation rates that will be used under the new system. It also launched a consultation on exceptions to the new rule that each party should generally bear its own process costs. 

So, if you are asking:

“Will it be cheaper to extend my lease in 2026?”

The answer is more complicated than simply saying yes. The reforms are designed to make lease extensions and freehold purchases cheaper and easier, but the final valuation rates and implementation arrangements still matter. 

If your lease is approaching a critical point, it may be worth getting professional advice rather than delaying a decision purely because you expect the reforms to reduce the premium.

What Is Happening to Ground Rent?

Ground rent is another major part of leasehold reform 2026. The draft Commonhold and Leasehold Reform Bill proposes to cap ground rents at £250 per year, with the ground rent changing to a peppercorn after 40 years for the relevant existing residential long leases covered by the proposal.  The Government is also considering a narrow exemption for certain “quid pro quo” leases, where a higher ground rent was agreed in exchange for a lower upfront premium.

That consultation was opened on 2 July 2026 and is due to close on 27 August 2026. 

So this is another area where leaseholders should be careful about headlines. The proposed ground rent cap is significant, but it is part of the developing legislative framework rather than a blanket rule that every leaseholder can immediately apply.

What Is Changing With Service Charges?

Service charge transparency is now a major part of the Government’s leasehold reform programme. On 15 July 2026, the Government confirmed measures intended to give leaseholders clearer information about the service charges they pay and stronger protections against unfair costs.

The reforms under the 2024 Act include greater transparency around service charges and building insurance. The Government has also been consulting on how these requirements should be implemented, including matters such as service charge information and the ability of leaseholders to scrutinise charges and services. 

For leaseholders, the practical objective is straightforward: You should be able to understand what you are paying for, how much is being spent and whether the costs are justified.

For RMC directors and managing agents, this means financial reporting and service charge administration will become increasingly important.

What About Managing Agent Fees and Qualifications?

The reforms are also looking more closely at the way residential buildings are managed. The Government’s July 2026 consultation on leaseholder protections includes proposals relating to the charges leaseholders pay and the services they receive, including a commitment to introduce mandatory qualifications for managing agents. 

This could be significant for RMCs and leaseholders who currently have concerns about the standard of professional management they receive. A managing agent is often responsible for:

• Service charge administration
• Contractor management
• Repairs
• Property inspections
• Resident communication
• Financial reporting
• Compliance coordination
• Major works

Greater professional standards could therefore have a direct effect on the quality and transparency of block management.

Will Leaseholders Have Greater Protection From Legal Costs?

Potentially, yes. The 2024 Act changes the approach to certain process costs in leasehold enfranchisement claims. The Government’s July 2026 consultation confirms that the Act establishes a general principle that each party should bear their own non-litigation process costs, subject to specified exceptions. The Government has also confirmed wider reforms intended to rebalance the legal-cost regime so leaseholders are better able to challenge unreasonable charges. 

This matters because the potential cost of challenging a landlord or management decision can be a significant concern for leaseholders. The reforms are intended to make the system less intimidating and more proportionate.

What Is Happening to Forfeiture?

Forfeiture is another significant area of the proposed reforms. The draft Commonhold and Leasehold Reform Bill would abolish the current forfeiture mechanism and replace it with a new lease enforcement system intended to be fairer and more proportionate. 

This is important because forfeiture can potentially result in a leaseholder losing their leasehold interest. The proposed replacement is intended to provide a different enforcement framework while still giving landlords a means of dealing with serious breaches. Again, this is part of the draft legislation and should not be treated as though the proposed replacement system is already fully operational.

Is Leasehold Being Abolished?

This is where many headlines become misleading. The Government has committed to bringing the existing leasehold system to an end over time and making commonhold the default tenure for flats.

In January 2026, it published a draft Bill proposing to ban leasehold for most new flats and strengthen the commonhold model. A separate consultation on banning leasehold for new flats was launched in January 2026 and considered issues such as exemptions, timing and transitional arrangements. But this does not mean that millions of existing leasehold flats have suddenly become commonhold. Existing leaseholders remain leaseholders unless the relevant legal process changes their ownership structure.

The Government’s proposed reforms are designed to make commonholds more viable and make conversion easier.

What Does Commonhold Mean for Existing Leaseholders?

Commonhold is intended to give flat owners freehold ownership of their individual units while the commonhold association manages the shared parts of the development. The Government’s draft Bill aims to make it easier for existing leaseholders to convert to commonhold if they want to. For many leaseholders, the attraction is obvious:

• There is no lease expiry.
• There is no traditional freeholder sitting above the homeowners.

And the owners have greater collective control over the management of the building. But commonhold does not remove the need to pay for repairs, insurance, maintenance and communal services. It changes who owns and controls the building, rather than making the costs of running a building disappear.

What Should Leaseholders Do in 2026?

The worst approach is to make a major property decision based solely on a headline saying that leasehold reform is “coming”. Instead, look at your individual position. If you are considering extending your lease, check:

• Your current lease length
• Your ground rent
• Whether you qualify for a statutory extension
• The likely premium
• Current valuation rules
• The expected implementation of the new system
• Professional costs
• Whether waiting creates any risks

If you are considering buying the freehold, look at the same issues alongside the eligibility requirements and valuation process. If your concern is service charges, review the lease, accounts, budgets and supporting information.

If your concern is poor management, consider whether the problem is with the managing agent, the landlord, the RMC structure or a combination of these and contact us for a strategy call.

What Has Actually Changed in 2026?

For clarity, here is the position as of August 2026.

Reform	Position in 2026
990-year lease extensions	Provided for by the 2024 Act, but implementation requires further steps
Removal of marriage value	Provided for by the 2024 Act, subject to implementation
New enfranchisement valuation method	Government consulting on valuation rates
Reduced process costs	Framework established, with consultation on exceptions
Service charge transparency	Government confirmed next steps and is consulting on implementation
Ground rent cap	Included in draft 2026 legislation
Commonhold for new flats	Government proposing to ban leasehold for most new flats
Easier commonhold conversion	Included in draft legislation
Forfeiture reform	Included in draft legislation
Managing agent qualifications	Government proposal under consultation

The key message is that 2026 is a transition year. Some reforms originate in legislation already passed in 2024. Others are contained in draft legislation. Others are still being consulted on.

The implementation date can therefore vary significantly from one reform to another. The Government’s own Regulatory Policy Committee confirms that the draft Bill contains proposals with different implementation dates. 

Will Leasehold Reform Make Buying a Flat Better?

That is the broader objective. The Government says the reforms are intended to give homeowners greater security, control and fairness. For existing leaseholders, the biggest potential changes are around:

• Lease extensions: longer terms and a new valuation framework.
• Freehold purchase: changes intended to make enfranchisement cheaper and easier.
• Ground rent: proposed restrictions on existing ground rents.
• Service charges: greater transparency and stronger protections.
• Management: proposals for higher professional standards.
• Commonhold: a fundamentally different ownership model for future flats.

Whether those changes deliver the intended benefits will depend heavily on the final legislation and how it operates in practice.

What Leaseholders Should Take Away From the 2026 Reforms

The biggest mistake would be to think that leasehold reform 2026 means one new law has suddenly changed every leasehold property in England and Wales. It has not.What has happened is more significant in another way: the Government is moving several parts of the leasehold system towards a fundamentally different model.

The Leasehold and Freehold Reform Act 2024 provides the foundation for major changes to lease extensions, enfranchisement, service charges and leaseholder protections. The draft Commonhold and Leasehold Reform Bill goes further by proposing commonhold as the standard model for most new flats and introducing additional reforms for existing leaseholders. And in July 2026, the Government took further steps on service charge transparency, enfranchisement valuation and process costs.  For leaseholders, the practical lesson is simple: do not make decisions based on headlines alone.

Check which reform applies to your situation, whether it is currently in force, and what implementation rules are still outstanding. For RMCs, freeholders and managing agents, this is also the right time to review how buildings are managed, how service charges are reported and whether current systems are ready for the new leasehold environment.

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