Latest update on Leasehold and Freehold Reform
How the proposed draft Commonhold and Leasehold Reform Bill affects leaseholder and freeholders (updated January 28, 2026)
Leasehold reform has been the subject of repeated announcements, consultations and legislative change over several years.While the Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024, most of its provisions did not take effect automatically and required secondary legislation to be brought into force. While some reforms are now in force, it seems likely that the rest will be sidelined following the government’s announcement on January 27, 2026. they will be replaced by the new draft Commonhold and Leasehold Reform Bill.
This page explains what has actually changed, what is expected but not yet in force, and what this means in practice for leaseholders.
Want the latest leasehold reform news? We will update this page with more information when the situation becomes clearer. So watch this space!
Click here to read more about the current differences between leasehold, freehold and commonhold.
Got a question about lease extension, collective enfranchisement or the right to manage? Call our specialist solicitors on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached.
The Leasehold and Freehold Reform Act 2024 – what is in force
The Leasehold and Freehold Reform Act 2024 received Royal Assent on 24 May 2024. However, most of its provisions do not take effect automatically and require secondary legislation to be brought into force.
The key change now in force: abolition of the two-year rule. From 31 January 2025, leaseholders no longer need to have owned their flat or leasehold house for two years before exercising statutory rights to:
• extend their lease; or
• enfranchise (buy the freehold of a leasehold house).
This change applies only to the statutory route. Informal or voluntary agreements with a freeholder to extend your lease or buy your freehold have always been possible from day one.
This is currently the only substantive lease extension or enfranchisement reform that is fully in force.
Right to Manage and mixed-use buildings – partial changes in force
In early March 2025, limited provisions of the 2024 Act relating to the Right to Manage came into effect.
Key changes include:
Leaseholders in buildings with up to 50% non-residential floor space may now qualify for:
- Right to Manage; and
- Collective enfranchisement
Leaseholders are now generally responsible only for their own legal costs when exercising Right to Manage or enfranchisement rights, unless a tribunal orders otherwise.
These changes expand eligibility, particularly for mixed-use developments, but do not otherwise overhaul the Right to Manage process.
The new Bill?
Those of you who are confused about the current state of leasehold reform may not welcome ideas for yet more new changes. This has been dragging on for years. Initial reforms were announced by the Conservative government in 2020, and the Leasehold and Freehold Reform Act 2024 was passed by Parliament in May 2024. Despite numerous initial announcements that much of that act would be enacted by the Labour Party, they appear to have gone back to basics – and are proposing to extend the reforms further – but possibly not until 2028!
At its core appears to be a proposal to ban the future creation of leasehold flats and the use of commonhold would be “reinvigorated”. Back in 2023, the Conservative housing secretary stated an intention to abolish leasehold entirely and replace it with commonhold. But faced with practical problems, they backed down and introduced and then passed the Leasehold and Freehold Reform Act 2024 instead. Will the Labour government succeed where the Conservative party did not? It remains to be seen.
But it is unclear both whether or not the existing proposals will withstand potential amendments, and when the changes might actually come in, if ever. So there’s more uncertainty and delay on the way.
2024 leasehold reforms not in force
Lease extension terms and valuation changes
The 2024 Act contained provisions that would:
• increase statutory lease extensions to 990 years (from 90 years for flats and 50 years for houses);
• reduce ground rent on extended leases to a peppercorn;
• change how lease extension premiums are calculated; and
• abolish the requirement to share marriage value with freeholders.
None of these changes are currently in force. They required secondary legislation and detailed valuation regulations, and from what the government announced on January 27, 2026, they will not be using the existing act for these changes.
Leasehold Reform – existing legal challenges and continuing uncertainty
Several aspects of the 2024 Act are already subject to legal challenge, including:
• the proposed abolition of marriage value; and
• the proposed capping of ground rent at 0.1% of freehold vacant possession value.
Judicial review proceedings were permitted in early 2025. As matters stand, these challenges add further uncertainty as to whether, when, and in what form some of the proposed valuation reforms will ultimately take effect.
How the proposed reforms affect leaseholders
The government has announced a radical shift in housing policy, including proposals to end the future creation of leasehold flats and to encourage the conversion of existing leasehold buildings to commonhold. While much of the detail remains subject to Parliamentary scrutiny, the direction of travel is now clear.
For existing leaseholders, the current legal framework remains in place for the time being. Rights such as lease extension, enfranchisement, and the Right to Manage continue to operate under existing legislation unless and until specific provisions are brought into force. There has been no announcement that these rights will be abolished or withdrawn.
However, the long-term intention is that commonhold becomes the default ownership structure for flats, with leasehold gradually reduced in importance. Where leaseholders convert to commonhold, they will gain collective ownership and control of management through the commonhold structure itself, rather than relying on statutory remedies designed for leasehold.
In practice, this means leaseholders are likely to face more choice rather than fewer rights:
Some may continue to rely on existing leasehold remedies
Others may pursue conversion to commonhold
Many buildings will remain leasehold for years, particularly where conversion proves complex or contested
While the new leasehold reform proposals are intended to simplify ownership, they are also likely to generate new areas of uncertainty and dispute, particularly around governance, cost-sharing, decision-making, and the transition from leasehold to commonhold. Specialist legal advice will remain essential during this period of change.
Leasehold Reform – the current position?
Remember:
• the new Bill has only just been published. It will have to fully go through Parliament and will be subject to much scrutiny and quite possibly significant amendments
• no conversion mechanism is currently in force; and
• there is no automatic conversion of existing leasehold property currently in place or even proposed
• Commonhold is nothing new. It was introduced in England and Wales on September 27, 2004, through the Commonhold and Leasehold Reform Act 2002. despite that, in the last 24 years it is only believed that under 20 commonholds had ever been set up!
Leasehold therefore remains the dominant tenure for existing flats currently.
Will the new Act make extending my lease cheaper?
Probably – that was certainly the purpose of the original act, and the new changes may benefit anyone whose lease is already below 80 years and will therefore benefit from the abolition of marriage value.
But as ever, the devil will be in the detail, and we don’t have to have confirmation of how some the changes will actually work in practice.
How the proposed reforms affect lease extensions
At present, the statutory right to extend a lease remains in force and has not been removed or replaced.
Qualifying leaseholders of flats continue to be entitled to a lease extension under the existing legal framework, and the abolition of the two-year ownership requirement, which came into effect in January 2025, remains the most significant change currently in force.
The government has indicated an intention to introduce further reforms affecting lease extension terms, valuation methodology and costs.
While the longer-term aim is to reduce reliance on leasehold ownership in favour of commonhold, lease extensions remain a critical remedy for the very large number of flats that will continue to be held on long leases for many years. Leaseholders should therefore proceed on the basis that lease extension rights remain available, while remaining alert to future changes as the reforms are developed.
Click here to read more about how our Lease Extension Solicitors can help you
How the proposed reforms affect collective enfranchisement
At present, there has been no announcement that the statutory right to collective enfranchisement has been abolished or withdrawn.
Qualifying leaseholders of flats therefore continue to have the right to acquire the freehold of their building under the existing legal framework.
The government has signalled an intention to simplify enfranchisement and reduce costs, but the detail of any new valuation or procedural changes is not yet settled. In the longer term, the promotion of commonhold may provide an alternative route to collective ownership and management, but this does not displace enfranchisement for buildings that remain leasehold.
For the foreseeable future, collective enfranchisement remains an important option for leaseholders seeking permanent control of their building, particularly where commonhold conversion is impractical or contested.
Click here to read more about the current position with regard to Lease Enfranchisement
How the proposed reforms affect the Right to Manage
The new leasehold reform proposals do not indicate that the Right to Manage (RTM) will be abolished or fundamentally changed.
The statutory RTM regime therefore continues to apply to qualifying leasehold buildings under the existing legal framework.
While the government has made clear its intention to end the future creation of leasehold flats and to promote the conversion of existing leasehold buildings to commonhold, these proposals do not remove RTM rights for buildings that remain leasehold. Where a building successfully converts to commonhold, management control is inherent in the commonhold structure and RTM is no longer required. However, for the many leasehold blocks that will remain outside commonhold for the foreseeable future, RTM remains a key mechanism by which leaseholders can take control of management without purchasing the freehold.
As with other aspects of leasehold reform, further detail may emerge through consultation and secondary legislation, and leaseholders should take advice on how best to exercise or protect their RTM rights during this period of transition.
Click here to read more about the Right to Manage your block
How the proposed reforms affect house enfranchisement
The proposed leasehold reform does not propose that the statutory right of house enfranchisement will be removed or replaced, and qualifying leaseholders of houses continue to be able to exercise enfranchisement rights under the existing legal framework.
The government has, however, reaffirmed its intention to end the future creation of leasehold houses, meaning that over time the need for house enfranchisement should diminish for newly built properties. For existing leasehold houses, enfranchisement therefore remains a key route to freehold ownership.
The earlier reforms already in force — including the removal of the two-year ownership requirement — continue to apply, but wider proposed changes to valuation, procedure and cost have yet to be fully implemented and will depend on secondary legislation.
As a result, while enfranchisement remains available and effective for qualifying house leaseholders, further changes may follow, and early advice remains important during this period of transition and uncertainty.
Click here to read more about the freehold purchase of leasehold houses – House Enfranchisement
How the proposed reforms affect the Right of First Refusal
At present, there has been no announcement that the Right of First Refusal (RFR) will be abolished or materially altered.
The statutory requirement for qualifying landlords to offer leaseholders the right to acquire the freehold before selling it to a third party therefore continues to apply under the existing legal framework.
That said, the government’s stated intention to end the future creation of leasehold flats and to encourage conversion of existing buildings to commonhold is likely, over time, to reduce the circumstances in which RFR arises. In particular, where buildings successfully convert to commonhold, the freehold is no longer held and traded in the conventional sense, making RFR redundant.
For the very large number of buildings that will remain leasehold for many years, however, RFR remains an important statutory protection.
As with other leasehold rights, further detail may emerge through consultation and secondary legislation, and leaseholders should take advice promptly if a freehold disposal is proposed during this period of transition.
Click here to read more about the Right of First Refusal
Leasehold Reform – should I extend my lease or buy my freehold now, or wait?
This remains a case-specific question, but do not consider the guidelines below as legal advice. The key considerations include:
1. Length of your lease
• Below 80 years:
Currently marriage value (an additional part of the valuation applicable to leases under 80 years) remains in place. So waiting to extend your lease may be attractive if marriage value is ultimately going to be abolished — but there is no certainty as to timing. It is a risk. And if the length of your lease is particularly low then bear remind that the premium you will need to pay continues to go up the shorter your lease becomes. That is also the case if the value of your property increases in the meantime.
• Above 80 years:
The financial benefit of waiting is less clear, and delay risks an increase in the premium you will need to pay as your lease get shorter. It is particular risky for you if your lease is approaching that 80 year period. Because if marriage value is not abolished, and delay meant your lease dropping below 80 years, you could find yourself paying a much premium.
• Long leases (85+ years):
There may be little immediate urgency. You might be better or worse off after the changes if and when they come in. But many people will hold off, they have little to lose provided they do not let their lease drop below 80 years, and depending on the detail, lease extensions may become easier cheaper and quicker.
2. Your timescale
If you are looking to sell or refinance in the near future, waiting for uncertain reforms may not be practical. Can you afford to wait for reforms that are still not clear and may never happen?
3. Ground rent
Leaseholders with high or escalating ground rent may benefit from future reforms — but this is not guaranteed, and some commentators have suggested that certain leaseholders could pay more, not less, under a new valuation framework.
Informal agreements and shared freeholds
• Informal or voluntary lease extensions and freehold purchases remain available and unaffected by the legislation.
• Where leaseholders already own a shared freehold, they can usually grant themselves lease extensions at no premium.
• However, non-participating leaseholders in a shared freehold structure may benefit from future statutory changes, potentially to the detriment of existing freeholders.
How much could waiting for the Act to come into force save me?
Another difficult question. It is not certain how much cheaper it will be to extend a lease when the Act does come into effect, as the method of calculating the premium still needs to be decided.
And some commentators have even queried whether, for a minority of leaseholders, the new act could actually increase costs for some – including those with low ground rents already or with more than 80 years left on the lease!
Can I still agree an informal lease extension or freehold purchase with my freeholder?
Yes – neither the 2024 Act or the new proposals affect any informal or voluntary agreement.
Leasehold reform – what about shared freeholds?
If you and your fellow flat owners have purchased the shared freehold of your building, you can, of course, already grant yourselves lease extensions for free – so unless there is a dispute between you, the Act shouldn’t affect that.
But remember, if there were leaseholders who did not take part in the shared freehold purchase, they are likely to benefit from the changes outlined above – and you as freeholders, could lose out.
Should I extend my lease or buy my freehold now or wait until the Act comes into effect?
That’s a difficult question, not least because we still don’t know when (or theoretically if) the Act will come into force and how some of the details will work.
If you are currently considering when to extend your lease or working with your fellow leaseholders to buy the freehold of your flats, there are number of issues you are going to need to consider.
But making that decision is not easy, not least because we still don’t know when (or theoretically if) the act will come into force and how some of the details will work.
And it also depends on your personal circumstances.
But in making that decision, you will need to bear in in mind the following:
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Can you afford to wait?
Even under the new rules, which should make the whole process quicker, it is still likely to take months to complete your lease extension or freehold purchase (especially if you’re buying your freehold and live in a large block).
So, if you’re looking to sell in the short or medium-term, you may decide to start the process of extending your lease now, or face having to put your life on hold indefinitely.
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How long is your lease?
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- Leases near to or below 80 years – , you could face difficulties if you want to sell your property currently. Lenders can be reluctant to lend against shorter leases.
And if your lease has already dipped below 80 years, then currently marriage value applies – which will add significantly to the cost of your lease extension. When the Act comes in, marriage value will no longer apply and therefore extending a lease below that crucial 80 year stage is likely to be significantly cheaper. So you might be better off waiting.
- Leases near to or below 80 years – , you could face difficulties if you want to sell your property currently. Lenders can be reluctant to lend against shorter leases.
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- Leases with say 82 or 83 years or more to run – you probably won’t benefit from the abolition of marriage value if you decide to go ahead with your lease extension in the short-term – so there is less reason to delay.
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- Longer leases – if you still have a lengthy term remaining on your lease, for example, 100 years or more, you might prefer to wait for the Act to come in. There’s probably not much benefit in applying for a lease extension now.
And don’t forget the basic principle – the shorter your lease gets, the more you’re going to have to pay for an extension.
- Longer leases – if you still have a lengthy term remaining on your lease, for example, 100 years or more, you might prefer to wait for the Act to come in. There’s probably not much benefit in applying for a lease extension now.
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The level of your existing ground rent
If you have an existing high level ground rent, then it’s quite possible that the new rules could save you money – but there’s no certainty. That could be a good reason for waiting for the Act come in.
Alternatively if you already have a very low ground rent, then your lease extension is much less likely to become considerably cheaper – so you might plump to extend your lease or buy your freehold sooner rather than later.
And it’s even been suggested by some commentators, that those with existing low ground rents might, in certain circumstances, even need to pay more to extend their lease when the Act does comes in.
Leasehold Reform – how much could waiting for the Act to come into force save me?
Another difficult question. It is not certain how much cheaper it will be to extend a lease when the Act does come into effect, as the method of calculating the premium still needs to be decided.
And some commentators have even queried whether, for a minority of leaseholders, the new act could actually increase costs for some – including those with low ground rents already or with more than 80 years left on the lease!
Can I still agree an informal lease extension or freehold purchase with my freeholder?
Yes – neither the 2024 Act or the new proposals affect any informal or voluntary agreement when it comes to extending your lease.
Leasehold reform – our overall view?
Overall, reform is progressing, but slowly and unevenly. 18 months after the original act was passed, virtually none of it has come into effect and it looks like being overhauled by the Labour government’s latest announcements.
The devil is often in the detail. We expect there to be significant scrutiny of the Bill in Parliament – that is certainly what happened with the 2024 act. Therefore so much remains uncertain – still, 18 months after the earlier Act.
At present:
• just one key leasehold reform is in force (abolition of the two-year rule);
• some Right to Manage changes apply;
• most valuation and lease extension reforms are not yet operational; and
• further legislation is promised but not yet delivered.
If you are thinking of exercising any of your rights under the existing leasehold legislation, your decision to proceed now or wait should be based on individual circumstances, not assumptions about the future.
