Leasehold Reform Update: New Bill Expected Before Christmas 2026

In June 2024, we reported on the Leasehold and Freehold Reform Act 2024 and the significant changes it was intended to bring for leaseholders in England and Wales. The Government has now announced that it intends to introduce a further Commonhold and Leasehold Reform Bill to Parliament before Christmas 2026. The proposals could bring substantial changes to the way flats are owned and managed, but they are not yet law.

The draft Bill was published in January 2026 and has since been considered by the Housing, Communities and Local Government Select Committee. The Government has said that it will take account of the committee’s recommendations before introducing the legislation. The Bill will then need to pass through Parliament, and further regulations and commencement provisions may be required before individual
reforms take effect.

What the proposed reforms may include

The Government’s draft Bill and recent announcements indicate that the proposed reforms may include:

  • A move towards commonhold for new flats. The draft Bill proposes to make commonhold the default form of ownership for most new flats and to make it easier for existing leaseholders to convert to commonhold. Commonhold gives flat owners freehold ownership of their individual units and a shared role in managing the building. The Government has also consulted on how a ban on most new leasehold flats could operate.
  • A cap on ground rents in existing leases. The draft Bill proposes a cap of £250 a year, reducing to a peppercorn after 40 years. This is a proposed future limit; leaseholders’ ground rents will not change simply because the draft Bill has been published.
  • A replacement for forfeiture. The draft Bill proposes a new, more proportionate enforcement process for breaches of residential leases, instead of the current forfeiture regime. The detail will depend on the legislation ultimately introduced and passed.
  • Limits on certain permission and administration fees. On 29 September 2026, the Government announced plans to consult on capping some fees charged to leaseholders and homeowners on privately managed estates. Examples include fees for permission to keep a pet or make minor alterations, and charges for providing documents or recording a change of mortgage provider. The fees to be covered and the level of any caps have not yet been settled.
  • Independent regulation of property agents. The Government has also announced plans for a licensing and qualification framework for property agents, with standards for conduct and complaints handling and potential powers to remove a licence where standards are not met. Further details are awaited.

These proposals are intended to strengthen leaseholders’ security and control over their homes. However, the draft may change during the legislative process, and the practical effect will depend on the final wording, commencement dates and supporting regulations.

What is happening under the 2024 Act?

The Leasehold and Freehold Reform Act 2024 remains an important part of the Government’s reform programme. Some provisions have already been brought into force, including the removal of the two-year ownership requirement for certain lease extensions and enfranchisement claims, and changes relating to right to manage. Other parts are being implemented in stages.

In particular, the new valuation rules for extending a lease or buying a freehold, including the removal of marriage value from the calculation, are not yet in force. The Government is consulting on the valuation rates needed for the new calculation; that consultation is due to close on 21 October 2026. A separate consultation on legal and valuation costs closed on 23 September 2026. The Government has also
identified technical changes to the 2024 Act that it intends to address through the forthcoming Bill before the valuation reforms can be commenced.

Until the relevant provisions are brought into force, the current statutory rules continue to apply. Leaseholders should therefore avoid assuming that a proposed ground rent cap, new valuation method or other announcement has already changed their legal rights or the amount payable under their lease.

What should leaseholders do now?

Leaseholders considering a lease extension, freehold purchase, sale or service charge challenge should take advice based on the law currently in force and the terms of their own lease. The timing and financial effect of any future reform will depend on the final legislation and when each provision starts to apply. Waiting for a proposed change may not be suitable in every case, particularly where a lease is shortening or a transaction is already under way.

We will continue to monitor the Bill and the implementation of the 2024 Act. Our earlier article, The Leasehold and Freehold Reform Act 2024, explains the original reforms and this article provides an update on the position as at October 2026.