Leasehold reform explained
What leasehold means and which England and Wales reforms are in force or still prospective as of 2026. Educational only.
This guide describes what leasehold means and which England and Wales leasehold reforms are already in force or still prospective as of September 2026. It covers leasehold tenure issues that commonly arise at conveyancing or after an offer is accepted.
Leasehold is a form of property ownership for a fixed period under a legal agreement called a lease with a landlord or freeholder. When the lease ends, ownership returns to the landlord. Most flats are leasehold. Houses can also be leasehold, often under shared ownership (Leasehold property; checked 17 September 2026). A long lease grants exclusive possession for a fixed term. The freeholder is the outright owner. Typical terms include 99, 125 or 999 years, though terms can vary. Charges under a lease may include ground rent, service charges, and administration charges (Buying or owning a leasehold home; checked 17 September 2026).
Around 5 million homes in England and Wales are leasehold, primarily flats (Leasehold toolkit - England, published 20 May 2026; checked 17 September 2026). England and Wales recognise freehold, leasehold and commonhold. Scotland's feudal system was replaced by outright ownership from 28 November 2004. The reform Acts described below apply to England and Wales, not Scotland's land-tenure system (HMRC Capital Gains Manual CG70223; checked 17 September 2026).
Tenure terms also appear in the jargon guide. A related overview of the legal purchase process appears in Conveyancing explained.
HOME READY Guide Limited is not a law firm. This article is general information only. Whether a specific lease or purchase is affected is a matter for the buyer's solicitor or licensed conveyancer.
Ground rent on new leases: the 2022 Act
Ground rent is a recurring rent reserved by a lease to the freeholder, separate from service charges for building upkeep.
The Leasehold Reform (Ground Rent) Act 2022 is UK Public General Act 2022 c. 1. Royal Assent is recorded as 8 February 2022 (legislation.gov.uk; checked 17 September 2026). For most new qualifying long residential leases, ground rent cannot legally be more than one peppercorn per year. A peppercorn ground rent means no money is payable as ground rent on regulated leases. Administration fees for collecting peppercorn rent are banned. Fines can reach £30,000 (Leasehold Reform (Ground Rent) Act 2022 guidance; checked 17 September 2026).
The Act has been in force for most new leases from 30 June 2022, and for retirement-home leases from 1 April 2023. It applies in England and Wales. Exceptions include community-led housing, certain financial products, and business leases as defined. Statutory lease extensions are exempt. A regulated lease is generally one granted on or after the relevant commencement date, for a term of more than 21 years for a single dwelling, granted for a premium (or varied by deemed surrender and regrant), and not an excepted lease. On voluntary extensions, the Act requires the extended portion to be at peppercorn rent; the residual original term may keep the original rent subject to the Act's rules (user guidance on gov.uk; checked 17 September 2026).
Existing leases granted before commencement are a separate category from these new-lease rules. Existing ground-rent levels are not rewritten by the 2022 Act alone.
Leasehold and Freehold Reform Act 2024: what is live
The Leasehold and Freehold Reform Act 2024 (LFRA 2024) is UK Public General Act 2024 c. 22. It received Royal Assent on 24 May 2024 (legislation.gov.uk; checked 17 September 2026). Part 9, including section 124 on commencement, came into force on Royal Assent day. Sections 113 and 117 to 119 came into force two months after Royal Assent. Other provisions come into force on days appointed by the Secretary of State by regulations. Many core reforms remain uncommenced until commencement regulations appoint days.
Three commencement orders had appointed days as of 17 September 2026:
- Commencement No. 1 brought sections 114 to 116 (Building Safety Act remediation-related provisions) and a related section 120 definition into force on 31 October 2024 (SI 2024/1018).
- Commencement No. 2 brought section 27 into force on 31 January 2025. Section 27 removes the previous two-year ownership wait before certain enfranchisement and lease-extension claims (SI 2025/57).
- Commencement No. 3 brought sections 49 to 52 (Right to Manage changes) and section 64 insofar as it inserts Landlord and Tenant Act 1985 section 20J as regards Right to Manage into force on 3 March 2025 (SI 2025/131). No Commencement No. 4 appeared on legislation.gov.uk as of 17 September 2026.
Right to Manage (RTM) is a statutory process that can allow qualifying leaseholders to take over management of a building from the landlord through an RTM company. The March 2025 changes include raising the non-residential limit to 50% and related cost changes, matching the official toolkit summary (toolkit published 20 May 2026; checked 17 September 2026).
The toolkit also records an assured-tenancy change for long leases from 27 December 2025. Building-safety related protections are described in the toolkit as live since July 2024. That toolkit line is separate from the LFRA sections 114 to 116 commencement date of 31 October 2024. The two dates are not the same event.
What remains prospective
Marriage value and hope value are valuation concepts that can affect the price of some lease extensions and freehold purchases under older rules. Schedule 4 paragraph 17 of LFRA 2024, which includes assumptions of no marriage or hope value, is marked Prospective on legislation.gov.uk. It was not in force at Royal Assent (see section 124(3)). The toolkit states that the amended enfranchisement scheme needs technical fixes via primary legislation before implementation. Marriage-value abolition is therefore not treated as live in this guide (checked 17 September 2026).
LFRA 2024 contains provisions for longer lease extensions (section 33) and for Leasehold Reform Act 1967 extensions on payment of a premium at peppercorn rent (section 34), among Part 2. In-force status of each section depends on commencement regulations. Many Part 2 valuation and extension-price provisions were still not commenced as of 17 September 2026.
Part 1 of the Act includes a ban on the grant or assignment of certain long residential leases of houses. The toolkit describes the ban as to be implemented, with government alignment to a planned leasehold-flat ban. Without a specific commencement statutory instrument switching the ban on for all purposes, this guide does not treat it as fully live (checked 17 September 2026).
A proposed cap on existing ground rents at £250, then peppercorn after 40 years, appears in the toolkit as a measure in the draft Commonhold and Leasehold Reform Bill. It is not LFRA law already in force. That measure is therefore omitted as a live figure here.
Commonhold and further reform direction
Commonhold is a form of freehold ownership for flats and shared buildings. Owners hold outright with no lease expiry, through a Commonhold Association. Commonhold already exists in law. The government vision for the future of flat ownership, and a draft Commonhold and Leasehold Reform Bill (published January 2026 per the toolkit), describe further measures such as making commonhold the default for new flats. Those further measures are forthcoming and are not treated here as already switched on (toolkit published 20 May 2026; checked 17 September 2026).
Who to ask
Questions about a specific lease, ground rent, service charges, enfranchisement, or lease extension are for a solicitor or licensed conveyancer. Solicitors in England and Wales are regulated by the Solicitors Regulation Authority (SRA). Licensed conveyancers are regulated by the Council for Licensed Conveyancers (CLC). Registers on those bodies' websites list regulated firms and individuals.
LEASE (lease-advice.org) is listed on gov.uk as free government-funded leasehold advice for England and Wales. Official hubs also include the leasehold property guide, buying or owning a leasehold home, Ground Rent Act guidance, and the Leasehold toolkit - England.
HOME READY Guide Limited is not a law firm and does not provide legal advice.
Key takeaways
- 1Leasehold ownership lasts for a fixed term under a lease; freehold is outright ownership; commonhold is a freehold model for shared buildings already available in law.
- 2The 2022 Ground Rent Act limits most new qualifying residential leases to peppercorn ground rent from the stated commencement dates.
- 3LFRA 2024 is partly in force: building-safety related sections from 31 October 2024, removal of the two-year claim wait from 31 January 2025, and Right to Manage changes from 3 March 2025.
- 4Marriage-value and hope-value abolition, many valuation and extension-price reforms, the new leasehold-houses ban, and a draft-Bill ground-rent cap for existing leases are not treated as live here without commencement.
- 5Last reviewed September 2026. HOME READY Guide Limited is not a law firm. This article is general information only and is not legal advice.
General information only. This article is for educational purposes and does not constitute legal, financial, surveying or tax advice. Every property purchase is different - always consult a qualified solicitor, mortgage adviser or surveyor before making decisions. Home Ready Guide Limited is not FCA authorised.
