Leasehold reform: what’s changing and what’s actually in force
Leasehold is going through the biggest overhaul in decades, but the changes are arriving in stages, and a lot of what you read online describes reforms that have been announced but are not law yet. This page keeps it straight: what is in force today, what has passed but is waiting to be switched on, and what is still only a proposal.
The single most useful thing to understand is that “announced” does not mean “in force”. Several headline reforms, including the abolition of marriage value and longer lease extensions, have been passed in principle but cannot be relied on yet. Here is the honest current picture.
Key takeaways
- Ground rent has been banned on most new leases since 2022, and the two-year ownership rule was scrapped in 2025.
- Right to Manage became easier in March 2025: more buildings qualify and you no longer pay the freeholder’s costs.
- The big cost savings, abolishing marriage value and 990-year extensions, have passed but are not yet in force.
- A new Bill proposes banning most new leasehold flats and capping existing ground rents at £250 a year.
- Do not make decisions on the assumption that the cheaper future rules will arrive in time. Plan around the law as it is now.
Why leasehold is being reformed
Leasehold has long been criticised as an unfair, one-sided form of ownership. Leaseholders pay ground rent for nothing, face service charges they have little control over, and watch their asset shrink as the lease runs down. Successive governments have promised to fix this, and the stated long-term aim is now to phase out leasehold for new flats altogether and replace it with commonhold, a system where flat owners collectively own and run their building. The reforms are the steps towards that goal, and they are arriving in two waves: the Leasehold and Freehold Reform Act 2024, and a new Bill working its way through Parliament.
What is already in force
These changes are law today and you can rely on them.
Ground rent banned on most new leases (2022). Leases granted from 30 June 2022 must have a peppercorn ground rent, meaning effectively zero. Retirement properties were covered from 1 April 2023. Older leases are not affected. See ground rent.
The two-year ownership rule abolished (2025). You no longer have to have owned your flat or house for two years before you can extend your lease or buy your freehold. You can act straight away once your purchase is registered.
Right to Manage made easier (3 March 2025). More buildings now qualify, because the limit on commercial space rose from 25 per cent to 50 per cent for Right to Manage claims, and in most cases leaseholders no longer have to pay the freeholder’s costs of the claim. See Right to Manage.
What has passed but is not in force yet
These measures are in the Leasehold and Freehold Reform Act 2024, so they have been passed by Parliament, but they need further regulations before they take effect, and most have not yet been switched on. Treat them as coming, not current.
Abolition of marriage value. The extra cost that applies when extending a lease under 80 years is due to be removed, which would make short leases much cheaper to extend. It still applies for now.
990-year lease extensions. The standard extension term is set to rise to 990 years, up from 90 years for flats and 50 for houses. The current terms still apply until this is in force. See lease extensions.
Cheaper valuations and no freeholder costs. A new way of calculating the premium, and an end to paying the freeholder’s costs when extending or buying the freehold, are due but not yet in effect for enfranchisement.
Service charge transparency. Standardised service charge demand forms, annual reports and stronger information rights are coming, along with a ban on hidden buildings insurance commissions. See service charges.
A legal challenge to some of these valuation reforms was dismissed by the High Court, but the measures still require secondary legislation, and the government has signalled it may carry some of them forward through its new Bill rather than the 2024 Act. The timing remains uncertain.
What the new Bill proposes
In January 2026 the government published a draft Commonhold and Leasehold Reform Bill, and it confirmed in the May 2026 King’s Speech that it would take this forward. The Bill is a proposal at this stage, expected to enter Parliament later in 2026, with the government aiming for it to become law around mid-2027 and key measures following after that. Its main proposals are to ban most new leasehold flats and make commonhold the default, cap existing ground rents, abolish forfeiture and replace it with a fairer system, make it cheaper and easier to extend a lease or buy a freehold, and tackle the unfair charges faced by some homeowners on private freehold estates.
Banning new leasehold flats and commonhold
The long-term centrepiece is the plan to stop most new flats being sold as leasehold and to make commonhold, where flat owners collectively own and manage their building with no separate landlord, the normal way of owning a new flat. A consultation on how to implement the ban closed in April 2026. This is a major structural change, and it is widely expected to take some years to come fully into effect, so it will not change anything overnight for people who already own a leasehold flat. Existing leaseholders would not be converted to commonhold automatically, though the reforms aim to make it easier to convert by choice.
The £250 ground rent cap
For existing leaseholders, the most watched proposal is the plan to cap ground rents at £250 a year, reducing to a peppercorn after 40 years. This would help the hundreds of thousands of leaseholders currently paying high ground rents. As things stand it is a proposal, not law, and the government’s target for it coming into force is around late 2028, although a committee of MPs has suggested it could come a year sooner. It would only immediately change things for people paying more than £250 a year. Until it is in force, your existing ground rent remains payable. See our ground rent guide for the detail.
What it means for you right now
The temptation is to wait for the cheaper rules, but that is risky, because the timing is uncertain and some measures may change shape before they arrive. If your lease is getting short, marriage value keeps adding to the cost while you wait, so delaying can cost more than it saves. If you are dealing with a high or escalating ground rent, extending your lease removes it now rather than years from now. And if your problem is poor management, Right to Manage is already easier to use today. In short, base your decisions on the law as it stands, and treat the future reforms as a bonus if they arrive in time, not as a plan.
Frequently asked questions
Has leasehold been abolished?
No. There is a long-term plan to phase out leasehold for new flats and move to commonhold, but that has not happened, and existing leaseholds continue. Most of the system is still in place while the reforms are rolled out in stages.
Has marriage value been abolished?
Not yet. Its abolition has been passed in the 2024 Act but is not in force, so marriage value still applies to leases under 80 years. This is one of the most common things people get wrong, because the change has been widely reported as if it had already happened.
Is the £250 ground rent cap in force?
No. It is a proposal in the new Bill, with the government targeting around late 2028. Until it becomes law and is switched on, existing ground rents remain payable as set out in the lease.
Should I wait for the reforms before extending my lease or buying my freehold?
It depends on your situation, and it is genuinely a judgement call. If your lease is near or below 80 years, waiting is risky. If it is long, you may lose little by waiting. Get advice on your specific lease before deciding, rather than assuming the cheaper rules will arrive in time.
What to do next
Work out which reforms actually affect you, then check whether the relevant one is in force or merely promised, using the sections above. If you have a decision to make about a lease extension, buying your freehold or ground rent, base it on today’s rules and take advice. And bookmark this page, because we update it as the law moves, which in this area it does often. For the system as a whole, start with leasehold explained.
This guide provides general information about leasehold reform in England and Wales and reflects the position when last reviewed. It is not legal advice, and the law in this area is changing, so check the current status before acting. For advice on your own situation, consult a qualified solicitor or a specialist such as the Leasehold Advisory Service (LEASE). Sources: Leasehold Reform (Ground Rent) Act 2022; Leasehold and Freehold Reform Act 2024 and its commencement regulations; draft Commonhold and Leasehold Reform Bill and accompanying policy statements (January 2026); 2026 King’s Speech; House of Commons Library briefings. Last reviewed [date]; we review this page regularly and whenever the law changes.