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 in England and £150/year in Wales, 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.
The Bill confirms the abolition of marriage value for lease extension premiums — removing 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. Under the Bill 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 statutory lease extension term is extended from the current 90 years to 990 years, combined with zero ground rent. 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, abolish marriage value, extend lease extension terms to 990 years, and strengthen service charge rights. As of June 2026 it is in draft consultation and not yet law.
The Bill was in draft consultation as of June 2026. Most commentators expect Royal Assent no earlier than late 2027, with phased implementation stretching into 2028 and beyond. 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 in England and £150 in Wales, reducing to peppercorn after 40 years. This would override any escalation clauses. It is not yet in force.
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