Government publishes details of leasehold reform plans

Posted Friday 30th January 2026

On 27 January 2026, the Government published further details on its plans to reform the leasehold system in England and Wales, with the aims of reducing costs for homeowners and giving them greater control over how properties are owned and managed.

As part of the proposals, the Government has said that it will cap yearly ground rents in existing long leases to £250 from 2028, as well as reducing ground rents to a peppercorn (nil) after 40 years. The proposed changes will have a significant impact on the value of some landlords’ portfolios.

A draft of the Leasehold and Commonhold Reform Bill has been published for pre-legislative scrutiny. In addition to the cap on ground rents, the other key proposals include:

• Introducing commonhold as the default tenure;
• Banning the sale of new leasehold flats;
• Making it easier for existing leaseholders to convert to commonhold; and
• Stricter controls for landlords on the ability to enforce covenants in long leases, including the abolition of forfeiture.

If passed, the Bill will restrict the sale of new leasehold flats, with new flats instead sold as commonhold. Commonhold is a form of tenure whereby owners own the freehold to their flat whilst collectively sharing ownership of communal areas through a commonhold association. Whilst commonhold is not a new concept, there has been little uptake in this form of ownership, largely due to mortgage lenders being unwilling to grant mortgages over commonhold properties. Systemic change will therefore be required if commonhold is to work in practice.

The Bill will now be examined by the Housing, Communities and Local Government Select Committee, alongside a consultation on commonhold which remains open until 24 April 2026.

For more information, or to arrange a free call, please contact Charlotte White or Jessica Slater in our Real Estate team.

---

This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.

---

Share this article