The Commonhold and Leasehold Reform Bill represents the most radical overhaul of property ownership law in England and Wales in over 50 years. This guide explains every key provision, what is confirmed, what is still proposed, and what it means for your lease extension decision right now.
England and Wales are almost unique in the developed world in their widespread use of residential leasehold — a system in which flat owners do not own the land, pay ground rent to a private freeholder, and hold a diminishing time-limited interest in their home. An estimated 4.98 million leasehold dwellings exist in England alone.
The ground rent scandal — in which developers sold new-build leases with ground rents that doubled every 10 years — left hundreds of thousands trapped in unmortgageable properties. Service charge abuses, forfeiture threats, and the cost of lease extension have generated sustained political pressure. The Leasehold and Freehold Reform Act 2024 addressed some issues. The 2026 Bill goes much further — proposing to phase out leasehold entirely for new residential flats.
New-build flats in England and Wales would be sold as commonhold by default, with leasehold prohibited for new residential properties. This brings England and Wales in line with Scotland, which banned new residential leases in 2000. Existing leasehold properties are not affected — but voluntary conversion to commonhold would be made significantly easier.
The Bill proposes to retrospectively cap ground rent on all existing residential leases at £250/year, reducing to peppercorn (zero) after a further 40 years. This overrides any escalation clauses — including doubling clauses and RPI-linked reviews. Full details in our dedicated article: Ground Rent Cap £250 — What It Means for Existing Leaseholders.
Marriage value abolition is already law under the Leasehold and Freehold Reform Act 2024 but has not been commenced. The draft Bill is expected to fix technical flaws in those provisions so they can be brought into force. Abolition would remove the 80-year cliff effect that currently adds tens of thousands of pounds to extension costs for leaseholders with short leases. On a £500,000 flat with a 72-year lease, marriage value currently adds £15,000–£40,000 to the extension premium. Once abolition takes effect this element becomes zero.
However, this provision is not yet in force. Every month below 80 years that passes increases the marriage value owed under current law. For the full analysis of whether to wait or extend now, see: Should I Wait for the Reforms or Extend My Lease Now?
The 2024 Act provides for the statutory lease extension term to rise from 90 to 990 years with zero ground rent, but this is not yet in force and the draft Bill is expected to fix technical flaws first. This creates a permanent interest indistinguishable from freehold ownership for any practical purpose. Re-extension would never be needed within any realistic lifetime.
Commonhold is flat ownership with no lease, no freeholder, and no time limit. Each owner holds their unit outright and is a member of a Commonhold Association managing the shared building. The Bill proposes commonhold as mandatory for new-build flats and reduces the threshold for voluntary conversion of existing buildings from unanimity to a majority vote among leaseholders.
The freeholder's theoretical right to forfeit (terminate) a leaseholder's lease for breach — including non-payment of as little as £350 in service charges — is proposed for abolition. This would be replaced by a debt recovery regime that cannot result in the loss of the leaseholder's home.
Freeholders and managing agents would be required to publish detailed annual accounts and benchmark service charge information. The First-tier Property Tribunal's jurisdiction is expanded and charges exceeding benchmarks by more than 20% would face automatic referral.
The Bill proposes to ban leasehold for new-build flats, replace it with commonhold, cap ground rent on existing leases at £250 per year falling to peppercorn after 40 years, and strengthen service charge rights. It is also expected to fix technical flaws so the 2024 Act's marriage value abolition and 990-year extensions can be brought into force. It is a draft Bill and not yet law: as of 12 October 2026 it has not been introduced to Parliament.
As of 12 October 2026 the draft Bill (published 27 January 2026) has not yet been introduced to Parliament. The Housing Committee recommended introduction in autumn 2026. Royal Assent is unlikely before 2027, and the government expects the ground rent cap to take effect in late 2028 (the Committee recommended late 2027). Individual provisions require separate commencement orders.
No. The Bill proposes to ban leasehold only for new-build flats going forward. Existing leasehold properties remain leasehold unless leaseholders choose to collectively purchase the freehold or convert to commonhold. The Bill proposes to make conversion easier by requiring only a majority vote rather than unanimity.
Commonhold is flat ownership with no lease, no freeholder, and no time limit. You own your unit outright and are a member of a Commonhold Association. There is no ground rent and no lease running down. It is equivalent to US condo ownership and is standard across most of Europe.
Potentially. If your lease is below 80 years you may be weighing whether to wait for marriage value abolition. However the Bill is not yet law and has no confirmed commencement date. Most specialist surveyors advise extending under existing law rather than waiting.
The Bill proposes to retrospectively cap ground rent on all existing residential leases at £250 per year, reducing to peppercorn after 40 years. This would override any escalation clauses. It is not yet in force.
🇺🇸 American buying a UK flat?
The American's Guide to Buying a UK Leasehold Flat
30 pages. Ground rent, the 80-year rule, marriage value, stamp duty, US tax reporting and the 2026 reforms — all in plain American English. Written by Rahul Tandon, LeaseVault founder.
This guide is researched from official and primary sources. Check them directly before relying on any figure or date.
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