The Commonhold and Leasehold Reform Bill

What’s proposed, and what isn’t law yet

Last reviewed 30 June 2026 · Written by Max van der Heiden

In January 2026 the government published a draft Bill that, if it becomes law, would be the biggest change to how flats are owned in England and Wales for a generation. It would stop most new flats being sold as leasehold, cap the ground rent that millions of existing leaseholders pay, and scrap the rule that can let a freeholder take your flat over a debt. This guide explains what is in it, in plain English, and what it would mean for you.

Hold onto one thing as you read. This is a draft. A draft Bill is a proposal, published so it can be picked over before a final version is put to Parliament, and none of it is law yet. So treat everything below as proposed, not in force, and do not make any decision about your own lease on the assumption that it has already happened.

Key takeaways

  • The Bill is a draft, published on 27 January 2026. Nothing in it is law today.
  • It would ban the sale of most new leasehold flats and make commonhold the normal way to own a new flat instead.
  • It would cap ground rent on existing leases at £250 a year, then cut it to a peppercorn, meaning effectively zero, after 40 years.
  • It would abolish forfeiture, the process that can let a freeholder end your lease and take the flat, often over a modest sum.
  • The government is aiming to introduce the final Bill in autumn 2026 and pass it around mid-2027, with the individual changes switched on later, each on its own timetable.

Contents

  1. What the Bill is, and where it has got to
  2. Banning new leasehold flats and making commonhold the default
  3. Capping ground rent on existing leases at £250
  4. Abolishing forfeiture
  5. Charges on freehold estates
  6. How this fits with the 2024 Act
  7. When will any of this actually happen?
  8. What it means for you right now
  9. Frequently asked questions
  10. What to do next

What the Bill is, and where it has got to

The Bill is built around commonhold. Commonhold is a way of owning a flat outright, with no landlord and no expiry date, where the flat owners jointly own and run the whole building through a body called a commonhold association. It is the opposite of leasehold, where you own the flat for a fixed number of years and a separate freeholder sits above you, controls the building and eventually gets it back. Commonhold has technically existed since 2002, but it was made so awkward to use that almost nobody did.

The government published the draft Commonhold and Leasehold Reform Bill on 27 January 2026, alongside a consultation. A cross-party group of MPs, the Housing, Communities and Local Government Committee, then examined it line by line, a stage called pre-legislative scrutiny, and reported on 27 May 2026. They called the draft a significant step but said the government should go further and faster. The government confirmed in the 2026 King’s Speech that it would bring the Bill forward in the 2026 to 2027 parliamentary session. A separate consultation on how to ban new leasehold flats closed on 24 April 2026.

Banning new leasehold flats and making commonhold the default

The centrepiece is a ban on selling most new flats as leasehold. New flats would instead be sold as commonhold, so that each owner holds their flat outright and shares ownership of the building with their neighbours, with no freeholder taking ground rent or running things from above. There would be limited exceptions, for example shared ownership homes and purpose-built rental blocks.

The Bill would also make it easier to convert an existing building to commonhold. At the moment that needs every leaseholder, lender and the freeholder to agree, which almost never happens. The draft would lower that bar so a smaller majority of leaseholders could drive a conversion.

Two points matter for anyone who already owns a leasehold flat. First, the Bill would not convert your flat to commonhold automatically. Your existing lease carries on as before, and any move to commonhold would be a choice, not something done to you. Second, this is the longest-range part of the whole package. The housing minister has said the ban on selling new leasehold flats is unlikely to be switched on during this Parliament, so it will not change anything overnight.

Capping ground rent on existing leases at £250

Ground rent is a charge that many leaseholders pay the freeholder each year, usually for nothing in return. New leases granted from 30 June 2022 already have a peppercorn ground rent, meaning effectively zero, under the Leasehold Reform (Ground Rent) Act 2022. The catch is that older leases are not covered, so if your lease was granted before that date you still pay whatever it says, which for some people climbs over time into hundreds or thousands of pounds.

The Bill proposes to cap ground rent on those existing leases at £250 a year, and then reduce it to a peppercorn after a transition period of 40 years. It would only put money back in your pocket straight away if you currently pay more than £250.

The timing here is the part to watch, and to be honest about. The government’s stated target has been late 2028. The committee of MPs recommended bringing that forward to late 2027, and in June 2026 it was widely reported that the government is expected to commit to the earlier date. As things stand on 30 June 2026 that earlier date has not been confirmed in an official government source, so treat late 2027 as a strong possibility rather than a promise. Either way, until the cap is law and switched on, your existing ground rent remains payable in full. Our ground rent guide covers where you stand today.

Abolishing forfeiture

Forfeiture is the process that can let a freeholder end your lease and take back the flat if you break one of its terms, including falling behind on service charges or ground rent. It has long been criticised because the sums involved can be small set against the value of the home at stake. The Bill would abolish forfeiture for long residential leases and replace it with a court-based scheme. Under that scheme a freeholder would have to go to court, and the court could order you to put the breach right, or in serious cases order a sale, but it could not simply hand your flat to the freeholder and wipe out everything you have built up in it.

Charges on freehold estates

This part is for people who own a freehold house on a managed estate rather than a leasehold flat. Many such owners pay an estate rentcharge towards shared roads, drainage and green spaces, an arrangement often nicknamed fleecehold. Today they can face severe penalties if they fall into arrears, under powers in the Law of Property Act 1925. The Bill would repeal the harshest of those enforcement powers and require the charge owner to give notice before taking action. The government has been consulting separately on these protections for homeowners on freehold estates.

How this fits with the 2024 Act

It is easy to get the two pieces of reform muddled, so it is worth keeping them apart. There is the Leasehold and Freehold Reform Act 2024, which has already passed, and then this new Bill, which has not. The 2024 Act is the one that holds the big savings on extending a lease or buying a freehold: scrapping marriage value, which is the extra cost that applies once a lease drops below 80 years, and longer extension terms of 990 years. Parts of that Act are in force, including the removal of the old two-year ownership rule from 31 January 2025 and easier Right to Manage from 3 March 2025. But the central money-saving measures are not yet switched on.

This is where the new Bill becomes relevant to lease extensions. The government has said the 2024 Act contains drafting errors that have to be corrected by fresh primary legislation before those savings can take effect, and it intends to make those corrections through this Bill. A group of freeholders is also challenging parts of the 2024 Act in the Court of Appeal, but the minister has been clear that the hold-up is the drafting fixes, not the court case. For what this means if you are weighing up a lease extension now, see our lease extensions guide.

When will any of this actually happen?

Here is the honest sequence, with the firm dates and the aims kept separate.

  • 27 January 2026: the draft Bill was published.
  • 24 April 2026: the consultation on banning new leasehold flats closed.
  • 27 May 2026: the committee of MPs published its scrutiny report.
  • Autumn 2026: the government aims to introduce the final Bill to Parliament.
  • Around mid-2027: the government’s aim for the Bill to receive Royal Assent, the point at which it formally becomes law.
  • After that: each measure is switched on by separate regulations, on its own timetable. The ground rent cap is targeted for late 2027 or late 2028, while the ban on new leasehold flats is expected to take longer, probably beyond this Parliament.

The dates from autumn 2026 onwards are aims, not guarantees. Reform in this area has slipped before, and a Bill this large can change shape as it goes through Parliament.

What it means for you right now

Nothing in the Bill changes your position today. If you pay a high ground rent, the £250 cap is not in force, so the full amount is still due. If you are thinking about extending your lease or buying your freehold, the cheaper rules in the 2024 Act are not switched on either, so you would still pay under today’s system, including marriage value if your lease has dropped below 80 years. Waiting for the reforms to land is really a bet on timing, and if your lease is getting short the cost of waiting can outrun any future saving. Base your decision on the law as it stands, take advice on your own lease, and treat the reforms as a bonus if they arrive in time rather than as a plan you can rely on.

Frequently asked questions

Is the Commonhold and Leasehold Reform Bill law?

No. It is a draft, published so it can be scrutinised before a final version is put to Parliament. The government aims to pass a final version around mid-2027, and the detail may change along the way.

Will my leasehold flat be turned into commonhold automatically?

No. Your existing lease carries on. The Bill aims to make it easier to convert to commonhold if you and your neighbours choose to, but it would not convert you without your involvement.

Is the £250 ground rent cap in force?

No. It is a proposal. The target is late 2027 or late 2028, and it is not yet law. Until it is switched on, the ground rent set out in your lease remains payable.

Does the Bill make it cheaper to extend my lease?

Not directly. The cost savings sit in the Leasehold and Freehold Reform Act 2024, which is not fully in force. The Bill is expected to fix drafting problems in that Act so those savings can be switched on later.

When will new leasehold flats be banned?

Later than the rest of the package. The housing minister has said the ban is unlikely to come into force during this Parliament.

What to do next

Work out which of these proposals actually touches your situation, then check whether it is in force yet, rather than assuming. Our leasehold reform tracker keeps the full picture of what is in force, what has passed but is waiting, and what is still only proposed. If you have a decision to make about a lease extension, buying your freehold or a high ground rent, base it on today’s rules and take advice first. Bookmark this page, because we update it as the Bill moves through Parliament.

This guide provides general information about the draft Commonhold and Leasehold Reform Bill 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

Last reviewed 30 June 2026. We review this page regularly and whenever the law changes.