Leasehold Reform Uncertainty Grows in 2026

A reform process that has lost momentum

When LAFRA first became law, expectations were high. The reforms promised to make lease extensions cheaper, simplify the process for leaseholders and create a fairer system overall.

Yet much of that promise remains theoretical. While a small number of changes have been introduced, the most financially significant elements, particularly those affecting lease extension costs, are still not in force.

Part of the problem is that the legislation itself is not yet fully workable. Key details, such as how lease premiums should be calculated, still require further clarification. Without this, the reforms cannot be properly implemented in practice. As a result, what was intended to be a clear step forward has instead become a slow and fragmented process.

Legal challenges add further uncertainty

Recent developments have added another layer of complexity. Freeholders and investor groups have continued to challenge aspects of the legislation, arguing that some of the proposed changes interfere with their property rights.

A new appeal has now been allowed to proceed, raising the possibility that parts of the reform could be delayed further or even altered before they come into effect. While the outcome is not yet known, the existence of this challenge alone is enough to create hesitation across the market.

For leaseholders, this means that reform is no longer just delayed, it is uncertain in its final form.

The growing issue of “false hope”

One of the less obvious effects of these delays is the sense of false hope that has developed among flat owners.

Many leaseholders are holding off making decisions based on changes that have been announced but not yet delivered. On paper, the future looks more favourable. In reality, very little has changed in the short term.

This gap between expectation and reality can lead to a kind of standstill. Sellers delay putting their flats on the market, buyers remain cautious and transactions slow down. All the while, the underlying issues that affect leasehold properties continue to exist.

Why short lease owners are particularly affected

This uncertainty is especially significant for those with short leases. Unlike other factors in the property market, lease length is not static. It reduces year by year, and that reduction can have a direct impact on both value and saleability.

As leases shorten, the cost of extending them typically increases. At the same time, buyer demand often weakens, particularly once a lease falls below key thresholds such as 80 years. Mortgage options can also become more limited, further reducing the pool of potential buyers.

Although LAFRA proposes to address some of these issues, including the removal of marriage value, those changes are not yet in place. For now, the existing system still applies. This means that waiting does not preserve the current position, it allows it to gradually deteriorate.

An unclear and moving timeline

Perhaps the most challenging aspect for leaseholders is the lack of a clear timeline. Early expectations suggested that meaningful changes would follow relatively quickly after the Act was passed.

Instead, delays have continued to build. Legal appeals, ongoing consultations and the need for further legislation have all contributed to pushing implementation further into the future. In some cases, estimates now suggest that key elements could take several years to fully come into force.

For flat owners trying to make decisions, this lack of certainty makes forward planning extremely difficult.

The psychology of waiting

There is also a human side to this situation. When reform is repeatedly described as imminent, it creates a natural tendency to hold off and wait for a better outcome.

However, when that sense of imminence stretches over a long period, the risks begin to shift. What once felt like a cautious and sensible decision can gradually turn into missed opportunities and increasing frustration.

This is something that is becoming more common among flat owners, particularly those who have already spent a year or more waiting for change that has yet to materialise.

A shift towards certainty

As a result, some sellers are beginning to rethink their approach. Rather than focusing on what might happen in the future, they are placing more value on what can be achieved in the present.

This does not mean that leasehold reform is irrelevant. It remains an important and potentially positive development. However, it does mean recognising that reform is a long-term process rather than a fixed event that will arrive at a predictable time.

For many, the balance is shifting. The certainty of acting now is starting to outweigh the uncertainty of waiting.

A more realistic way to view reform

It can be helpful to view leasehold reform not as a single solution, but as an ongoing process shaped by politics, legal challenges and practical implementation issues.

That process is unlikely to move in a straight line. There will be delays, adjustments and periods of uncertainty along the way. While the direction of travel may be clear, the timing is not.

For flat owners, especially those with shorter leases, this distinction matters. Decisions made today cannot rely entirely on outcomes that may still be several years away.