Leasehold Advice
Leasehold Reform Explained
Leasehold reform has come in pieces. Some changes are in force, some are still waiting to commence. This guide cuts through the headlines and explains what actually matters for a flat sale today.
Where Things Stand
Leasehold reform is the long-running programme of changes to the law governing leasehold flats in England and Wales. The direction of travel has been the same for years: cheaper and easier lease extensions, lower ground rents, stronger leaseholder rights against the freeholder, and over the longer term a move towards commonhold for new flats. The delivery has been less neat. Reform has come in pieces, spread across several Acts, and some of the biggest changes have been passed by Parliament but are still waiting to come into force.
This guide cuts through that. It sets out what is actually in force in 2026, what is on the books but not yet commenced, and what is still only a proposal. If you own a flat or are thinking of selling one, knowing the difference matters: it is the rules that have commenced, not the rules that have been promised, that govern your lease and any extension or sale you do today.
This guide describes the law in England and Wales. Scotland has its own system (long leases of dwellings were largely converted to ownership under the Long Leases (Scotland) Act 2012), and Northern Ireland has its own arrangements; neither is covered here.
Why the System Needs Reform
The case for reform has been built up over decades. Long leasehold flats took off in the Victorian era, when the system was designed to give freeholders a continuing interest in the land while letting them grant long leases on flats inside the same building. The system has endured, but it has produced a list of recurring problems that successive governments have wanted to fix.
Short leases and marriage value
A flat on a short lease loses value quickly as the term drops, especially below 80 years. The legal route to extending the lease exists, but on a lease at or below 80 years the leaseholder also has to pay marriage value: an extra slice of the premium that compensates the freeholder for the value uplift created by the extension. Marriage value can add tens of thousands of pounds to the cost of a single lease extension, and it has been one of the biggest single grievances driving reform.
Escalating ground rents
For many years, freeholders sold new leases with ground rents that doubled every ten or fifteen years, or were linked to the value of the flat. Over a long lease those clauses produced ground rents that became unaffordable and made the flats unsaleable. The 2022 Act stopped the practice for new leases, but it has not yet undone the existing leases that contain those clauses.
Freeholder power over the building
Even where the ground rent is small, the freeholder controls the management of the building, the insurance, the appointment of the managing agent and the service charge budget. Leaseholders have rights to challenge bad practice (consultation on big works, reasonableness of charges, redress through the tribunal), but the day-to-day balance of power is heavily in the freeholder's favour. The reform programme has been chipping away at this with Right to Manage and collective enfranchisement, both of which have been made easier in turn.
The cost and slowness of collective routes
Right to Manage and collective enfranchisement give leaseholders genuine power, but they have historically been expensive, slow and procedurally fiddly. The reforms have aimed at making them simpler and cheaper, with mixed success: the 2024 Act took useful steps on participation and costs, but the deeper valuation changes that would cut the price are still not in force.
What Is Already in Force
Three pieces of reform are actually working in 2026. Each has a specific scope, and none of them does the whole job.
Leasehold Reform (Ground Rent) Act 2022
The 2022 Act capped ground rent on most new long leases of residential premises in England and Wales granted on or after 30 June 2022. A long lease in property law means one originally granted for more than 21 years, judged on the term at grant rather than the years remaining today, so a flat with only 50 or 60 years left is still on a long lease for these purposes. The cap is a single peppercorn, which is the legal way of saying nothing. The Act applies only to new leases from that date onwards. A flat on a 999-year lease granted in 2023 will have a peppercorn ground rent; a flat on a 125-year lease granted in 2010 with a doubling clause is not touched by the Act and continues on the old terms.
Leasehold and Freehold Reform Act 2024, in part
The 2024 Act received Royal Assent in May 2024 and is being brought into force in stages. The provisions that have commenced so far are the building-safety and service-charge changes (in force from July 2024); the removal of the two-year ownership requirement for lease extension and collective enfranchisement (in force from January 2025); and the Right to Manage changes including the higher 50 percent non-residential limit for qualifying buildings (in force from March 2025). These are useful changes, but they sit alongside the much larger valuation provisions which have not yet commenced.
Renters' Rights Act 2025
The 2025 Act is primarily about the assured tenancy regime for renters rather than leaseholders, but it closed the ground rent trap that had been catching long-leaseholders. Where a flat's ground rent crossed a statutory threshold, the leaseholder could end up being treated as an assured tenant for some purposes, which carried serious side effects for them. The 2025 Act fixed this by taking long leases out of the assured tenancy regime altogether, so however high the ground rent goes, and however few years are left on the lease, the leaseholder is no longer at risk of being treated as an assured tenant.
What Is Promised but Not Yet in Force
This is the part that catches most leaseholders out. Several headline reforms have been passed by Parliament, but Parliament passing a law and the law coming into force are two different things. The big-ticket parts of the 2024 Act are still on the shelf.
Abolition of marriage value
The 2024 Act was drafted to abolish marriage value, which currently applies to lease extensions and collective enfranchisement on leases at or below 80 years and adds significantly to the premium. The abolition was the single most popular leaseholder-side reform in the Act. It is still not in force. Anyone extending a lease or enfranchising today is paying marriage value as they would have done before the Act was passed.
The 990-year statutory lease extension
The 2024 Act proposes to replace the current statutory 90-year extension with a single 990-year extension at peppercorn ground rent. This is also not in force. Statutory extensions today still run on the 1993 Act formula: 90 years added to the unexpired term, ground rent reduced to a peppercorn. That said, a block that buys its freehold by collective enfranchisement can still produce a similar outcome today, because the leaseholders' company can grant new 999-year leases once it owns the freehold.
The wider valuation reforms
Around marriage value, the 2024 Act includes a wider set of valuation reforms covering the capitalisation rates used for ground rent, the deferment rates used for the reversion, the abolition of hope value on non-participating flats in an enfranchisement, and a few other technical changes. None of these have commenced. Valuation in 2026 still works under the rules that applied before the 2024 Act was passed.
The freeholders' judicial review
A group of freeholders brought a judicial review challenge to the 2024 Act's valuation reforms, arguing that the changes would interfere with their property rights. The High Court dismissed the challenge in 2025. So the legal route to blocking the reforms has effectively closed, but the government still has to commence the relevant sections, and as of 2026 it has not done so. There is no confirmed timetable.
A cap on existing-lease ground rents
A separate strand of reform would cap the ground rent payable under existing leases (not just new ones). That proposal has been in the policy mix for several years but has not been enacted. Existing leases continue on the ground rent terms they were granted with, including doublers and RPI-linked clauses.
Commonhold
Commonhold is the long-term direction. A draft Commonhold and Leasehold Reform Bill is in development and the Law Commission has produced detailed proposals, but no legislation has yet been passed. For now, almost every flat sold in England and Wales is still a leasehold flat.
What It Means for Selling Your Flat Now
What matters for a sale today is the law that is actually in force. Anything still waiting to commence does not affect you yet. A sale you do today operates under the rules that are in force today, not the ones the next stage of the 2024 Act might bring.
Do not bank on future reforms in your valuation
A flat with a 75-year lease is priced today by reference to today's rules, including marriage value. A buyer's lender, a buyer's surveyor and a buyer's solicitor are all working with the law as it stands. Hoping that the marriage value abolition will commence before completion is not a basis on which to price a flat, and a buyer offered that hope as part of the asking price is likely to push back.
Lease extension and enfranchisement still work the old way
If you are deciding whether to extend before selling, run the numbers under today's rules: a 90-year extension under the 1993 Act, ground rent reduced to a peppercorn, marriage value where the lease is at or below 80 years. The statutory 990-year extension and the marriage value abolition are not options today. Collective enfranchisement is still a route to a much longer lease, though, because once the leaseholders own the freehold through their company they can grant themselves new leases of any length they choose, typically 999 years at peppercorn. A specialist valuer can model the cost under today's rules with reasonable accuracy; what nobody can do is predict when the new rules will commence.
Where a cash buyer fits
A specialist cash buyer is the route least exposed to legislative uncertainty, because the cash buyer is buying the flat as it stands and pricing the lease, the ground rent and the building as they are today. Where the flat has a short lease, a problematic ground rent or another reform-related issue that is making a residential sale slow or unreliable, the cash route lets the seller crystallise the price now rather than hoping for a future reform that may take another year, three years or longer to arrive.
Relevant Legislation
The reform programme spans several Acts, none of which alone does the whole job.
The Leasehold Reform, Housing and Urban Development Act 1993 is the backbone of the modern system. It gives long-leaseholders the statutory right to extend their leases and gives blocks the statutory right to collective enfranchisement. It is the Act under which lease extensions and enfranchisement claims still proceed today.
The Commonhold and Leasehold Reform Act 2002 introduced Right to Manage, brought in commonhold as a form of tenure (little used in practice), and made several procedural reforms. Right to Manage in particular has been a useful route for blocks that want control of the management without buying the freehold.
The Leasehold Reform (Ground Rent) Act 2022 capped ground rent on most new long leases of residential premises granted on or after 30 June 2022 at a peppercorn. It applies only to new leases granted from that date; existing leases continue on their original terms.
The Leasehold and Freehold Reform Act 2024 is the big reform Act. It has been brought into force in stages: building-safety and service-charge provisions in July 2024, the abolition of the two-year ownership requirement in January 2025, and the Right to Manage changes in March 2025. The marriage value abolition, the 990-year extension, the wider valuation reforms and several other parts are not yet in force. There is no confirmed commencement date.
The Renters' Rights Act 2025 is primarily about the rented sector but closed a specific trap that had been catching long-leaseholders whose ground rent crossed a threshold. The relevant provision came into force on 1 May 2026.
A draft Commonhold and Leasehold Reform Bill is in development, supported by the Law Commission's detailed proposals, and would aim to make commonhold the default for new flats and to cap ground rents on existing leases. It is not yet law and there is no confirmed timetable.
Further Reading
Two related guides sit alongside this one: the practical guide to extending your lease today, and the rules around the ground rent on your lease.
Frequently Asked Questions
Leasehold reform is the long-running programme of changes to the law governing leasehold flats in England and Wales. The aim is to put leaseholders in a stronger position against the freeholder: cheaper and easier lease extensions, lower ground rents, more rights to take over the management or buy the freehold, and a longer-term ambition to move new flats onto commonhold instead of leasehold. The reform programme has been delivered in pieces rather than as one big Act, and some of the biggest changes have been passed by Parliament but are still waiting to come into force.
Three pieces of reform are working in 2026. The Leasehold Reform (Ground Rent) Act 2022 capped ground rent on most new long leases granted after 30 June 2022 at one peppercorn (effectively nothing). The Leasehold and Freehold Reform Act 2024 has been commenced in stages: building-safety and service-charge provisions in July 2024; the abolition of the two-year ownership requirement for lease extension and collective enfranchisement in January 2025; and the Right to Manage changes (including the higher 50 percent non-residential limit) in March 2025. The Renters' Rights Act 2025 closed the ground rent trap that was catching long-leaseholders whose leases dropped into an assured tenancy on annual rent thresholds.
The biggest headline parts of the 2024 Act are still on the shelf. Marriage value, which adds substantially to the cost of extending a lease that has dropped below 80 years or buying the freehold of a block with short leases, has not yet been abolished. The proposed statutory 990-year lease extension is not yet available. The wider valuation reforms (changes to capitalisation and deferment rates, abolition of hope value) have not commenced. The proposed cap on ground rents under existing leases remains a separate piece of policy that has not yet been enacted. None of these have a confirmed commencement date as of 2026.
No, not yet. The Leasehold and Freehold Reform Act 2024 was drafted to abolish marriage value, but the provisions doing so are still not in force. Freeholders mounted a judicial review challenge to those changes; the High Court dismissed the challenge in 2025, but the government has still not commenced the relevant sections. Until that happens, marriage value continues to apply to lease extensions and collective enfranchisement on leases that are at or below 80 years, and it can add a meaningful amount to the premium.
Not under the statutory route. The Leasehold and Freehold Reform Act 2024 proposes a single 990-year extension at peppercorn ground rent in place of the current statutory 90-year extension, but that change is among the parts of the 2024 Act not yet in force. Statutory lease extensions today still operate on the 90-year extension plus peppercorn ground rent formula under the 1993 Act, with the same valuation rules including marriage value where the lease is at or below 80 years. Some freeholders will agree a longer informal extension by negotiation, separately from the statutory route. And where a block enfranchises collectively, the leaseholders' new company can grant 999-year leases at peppercorn from the day it acquires the freehold.
No. The peppercorn cap from the Leasehold Reform (Ground Rent) Act 2022 applies only to new long leases granted on or after 30 June 2022. Existing leases are still as written, including ground rents that double or escalate, until something changes. A proposed cap on existing-lease ground rents has been in the policy mix for several years but has not been enacted. The Renters' Rights Act 2025 did close one specific trap (where a high ground rent could push a long lease into an assured tenancy), but that is not the same as capping the rent itself.
A group of freeholders brought a judicial review challenge against parts of the Leasehold and Freehold Reform Act 2024, arguing that the proposed abolition of marriage value and the related valuation reforms would interfere with their property rights. The High Court dismissed the challenge in 2025, so the legal route to blocking the reforms has effectively closed. Even so, the government still has to commence the relevant sections, and as of 2026 it has not done so. The practical position is unchanged: marriage value, hope value and the current valuation rules still apply.
Probably not any time soon, but it is the long-term direction. Commonhold is an alternative form of flat ownership where each flat is owned outright (rather than on a lease) and the building is run by a commonhold association made up of the flat owners. It has existed in English law since 2002 but has barely been used. The current direction of policy, including Law Commission proposals and a draft Commonhold and Leasehold Reform Bill, is to make commonhold the default for new flats and to give existing leaseholders a route to convert. None of that is yet law. For the foreseeable future, the typical flat sale in England and Wales is still a leasehold sale.
Waiting is a real gamble, because there is no confirmed timetable for the parts of the 2024 Act that would help most. A leaseholder with a lease close to or below 80 years is paying marriage value on any extension done today; if the abolition is commenced before they extend, they save that money, but if it takes another year or two or three, the lease keeps shortening and the cost keeps rising. The right call depends on how short the lease is, how soon you might want to sell, and the value of your flat. A specialist enfranchisement valuer can model the numbers under today's rules and (cautiously) under the proposed rules, but neither they nor anyone else can promise a commencement date.
It means valuing the flat on the rules that are actually in force, not on the rules that might come in. A buyer's solicitor and surveyor will work with the current law, and a buyer with a mortgage will need a lender who is comfortable with the lease as it stands. Reform is not a reason to put a sale on hold; if anything, the uncertainty over when the bigger changes will arrive is itself a reason for many sellers to get on with the sale. If your flat has a short lease, a difficult ground rent or another reform-related problem, a sale to a specialist cash buyer is the route least dependent on future legislation, since a cash buyer can take a view on the flat as it stands today.