New Leasehold Reform Proposals Announced

The leasehold system could see an overhaul under the government’s new draft Commonhold and Leasehold Reform Bill. Unveiled on 27 January 2026, the proposal could herald significant changes for London property owners in particular, with the Capital claiming the highest ratio of leasehold properties in England.  

If the proposal sounds familiar, that’s likely because it follows on from the Conservative government’s own leasehold reform efforts. The Leasehold and Freehold Reform Act 2024 became law in the wash-up period immediately before the election. However, many of its measures are yet to be rolled out and would be implemented under the new bill. 

The target areas of the leasehold reform proposals include placing limits on the ongoing costs faced by leaseholders, and handing greater control over building management to flat owners. One such measure is a ban on new leasehold flats, with commonhold tenure replacing freehold as the default arrangement. This would hand full control to property owners, who would own their flat outright. Flat owners would jointly take on management duties for the building. 

In 2022, the Conservative government abolished ground rent on new leasehold homes. However, ground rent is still payable on existing leasehold flats, with costs sometimes spiralling over time. The proposed overhaul would introduce a £250 per annum cap on ground rent for existing leasehold properties, falling to peppercorn rates after 40 years.  

The government’s draft Commonhold and Leasehold Reform Bill measures also seek to abolish forfeiture, whereby freeholders can repossess a property over outstanding service charges. The threshold for court action currently stands at just £350. Under the new proposals, this system would be replaced by a “new, fairer and more proportionate lease enforcement scheme benefitting both leaseholders and landlords”. In theory, this would save leaseholders from eviction over minor sums, while letting landlords take action where warranted. 

Before any of these measures can come into effect, the bill must pass through the Housing Committee’s hands before progressing through parliament. The government is also holding multiple consultations on the draft Commonhold and Leasehold Reform Bill’s measures, which may be of interest to freeholders or leaseholders. 

Read more on BBC and in the draft Commonhold and Leasehold Reform Bill.