Leasehold Reform Guide: What's Changing for Leaseholders
A comprehensive guide to leasehold reform in the UK. Understand the new leasehold law UK changes, find out whether leasehold will be abolished, and learn what is the new law for leaseholders covering lease extensions, ground rent, right to manage, and building safety. Updated for leasehold reform 2026.
What Is Leasehold Reform?
Leasehold reform refers to the ongoing programme of legislative change aimed at improving the rights of leaseholders and addressing the structural imbalances in the leasehold system in England and Wales. For decades, leaseholders have faced challenges including escalating ground rents, expensive lease extensions, limited control over the management of their buildings, and a legal framework that heavily favours freeholders. Leasehold reform seeks to correct these problems through new laws, amended regulations, and improved protections.
The leasehold system has its roots in medieval land law. A leaseholder owns the right to occupy a property for a fixed period, while the freeholder retains ownership of the land. When the lease expires, ownership of the property reverts to the freeholder. This arrangement made practical sense for short-term tenancies, but it has become deeply problematic when applied to residential properties where people invest their life savings and expect to own their home outright. The question why are leasehold flats being banned reflects widespread public frustration with a system many regard as fundamentally unfair.
Understanding your leaseholder rights is the first step to navigating the reform landscape. Whether you are considering a lease extension, exploring right to manage, or weighing up collective enfranchisement, the reforms underway will affect the cost, process, and outcome of your claim.
The Leasehold Reform Act Timeline
Leasehold reform has progressed through several landmark pieces of legislation over the past three decades. Each Act has added new rights for leaseholders or addressed specific abuses within the system. Understanding this timeline is essential for knowing which rights you currently hold and which reforms are still to come.
Leasehold Reform, Housing and Urban Development Act 1993
This Act gave leaseholders of flats the statutory right to extend their lease by 90 years at a peppercorn ground rent, and introduced the right of collective enfranchisement, allowing qualifying leaseholders to join together to purchase the freehold of their building. It established the framework that still underpins most lease extension and collective enfranchisement claims today.
Commonhold and Leasehold Reform Act 2002
The 2002 Act introduced the right to manage, allowing leaseholders to take over management of their building without needing to prove fault on the part of the landlord. It also introduced the commonhold tenure as an alternative to leasehold, created the requirement for prescribed-form ground rent demands, and established new rules on service charge consultation and administration. The right to manage has become one of the most significant tools available to leaseholders seeking greater control over their buildings.
Leasehold Reform (Ground Rent) Act 2022
This Act came into force on 30 June 2022 and restricted ground rent on most new residential long leases to a peppercorn, effectively abolishing ground rent for new leases. It was the first concrete legislative step in the current wave of leasehold reform and addressed one of the most criticised aspects of the system: escalating ground rent clauses that could double every few years and render properties unsellable.
Building Safety Act 2022
While not exclusively a leasehold reform measure, the Building Safety Act 2022 has had a profound impact on leaseholders. It introduced protections for leaseholders in buildings over 11 metres from historical building safety remediation costs, created the Building Safety Regulator, and established a new regime for managing fire safety risks in higher-risk buildings. For leaseholders who had faced bills of tens or hundreds of thousands of pounds following the Grenfell Tower tragedy, this Act provided critical financial relief.
Leasehold and Freehold Reform Act 2024
The most recent and comprehensive piece of new leasehold law UK legislation, this Act received Royal Assent in May 2024. It proposes to abolish marriage value in lease extension calculations, increase the standard extension term to 990 years, remove the two-year ownership requirement for making a claim, ban the creation of new leasehold houses, and improve access to the right to manage. Many of its provisions are being brought into force through secondary legislation during 2025 and 2026, making leasehold reform 2026 a critical period for leaseholders to stay informed.
What's Changing for Leaseholders
The new leasehold law UK reforms represent the most significant package of changes to leaseholder rights in a generation. For anyone asking what is the new law for leaseholders, the key changes fall into several categories. Some have already been enacted, while others are being implemented through secondary legislation during 2025 and 2026.
Premium Calculation Reforms
One of the most impactful changes is the proposed abolition of marriage value in lease extension and enfranchisement premium calculations. Marriage value is the increase in property value that results from merging the leasehold and freehold interests, and it currently adds a significant sum to the cost of extending a lease with fewer than 80 years remaining. Removing it will make lease extensions substantially cheaper for leaseholders with short leases. The government is also introducing a standardised calculation method to replace the current system, which relies on contested valuations and often leads to disputes.
Lease Extension Improvements
The standard lease extension term is being increased from 90 years to 990 years at a peppercorn ground rent. This effectively gives leaseholders a lease so long that it is almost equivalent to freehold ownership. The two-year ownership requirement is also being removed, meaning leaseholders will be able to claim an extension immediately upon purchasing their property. These changes will make leasehold reform 2026 a turning point for anyone who has been waiting to extend their lease.
Right to Manage Improvements
The right to manage process is being simplified to make it more accessible. Reforms include removing the requirement for the building to contain at least two-thirds residential units, reducing the opportunities for freeholders to frustrate claims through technical challenges, and clarifying the costs regime so that leaseholders are not deterred by the risk of paying the freeholder's legal fees. These improvements aim to give more leaseholders practical control over how their building is managed and maintained.
Ground Rent Reforms
Building on the 2022 Act that capped ground rent at a peppercorn for new leases, the government has indicated its intention to address ground rent on existing leases. While no legislation has yet been passed to retrospectively reduce ground rents to zero, the direction of travel is clear. The question will leasehold be abolished is closely linked to the ground rent debate, as ground rent is one of the defining features that distinguishes leasehold from freehold ownership.
How Reform Affects Freeholders and Managing Agents
Leasehold reform does not only affect leaseholders. Freeholders and managing agents must adapt to a significantly changed regulatory environment. The reforms reduce freeholder income from ground rents and lease extension premiums, increase transparency requirements around service charges, and make it easier for leaseholders to exercise the right to manage or pursue collective enfranchisement.
For managing agents, the reforms demand higher standards of transparency, communication, and financial reporting. The Leasehold and Freehold Reform Act 2024 introduces new requirements for service charge demands, including standardised formats and clearer breakdowns of costs. Managing agents who fail to meet these standards risk losing business as leaseholders become better informed and more empowered to challenge poor management or exercise their right to manage.
- Reduced ground rent income for freeholders on new leases and future extensions
- Lower lease extension premiums as marriage value is abolished
- Stronger leaseholder rights to challenge unreasonable service charges
- Simplified right to manage process increasing leaseholder control
- Greater transparency requirements for managing agents on costs and contracts
- New building safety obligations and compliance duties for higher-risk buildings
At Block, we welcome reforms that raise standards across the sector. Our leasehold management service is designed to meet and exceed the requirements of the new legislation, ensuring that both freeholders and leaseholders benefit from professional, transparent, and compliant building management.
What Leaseholders Should Do Now
With leasehold reform 2026 bringing many of the new provisions into force, leaseholders should take proactive steps to ensure they benefit from the changes. Whether you are asking is leasehold going to be scrapped or simply want to understand your options, there are practical actions you can take today.
- Check your remaining lease term: if it is below 80 years, consider a lease extension sooner rather than later, as costs increase significantly as the term shortens
- Review your ground rent clause for escalation provisions, especially doubling clauses that could push your annual rent above the critical 250 pound threshold
- Explore the right to manage if you are dissatisfied with your current managing agent or want greater control over service charges and building maintenance
- Consider collective enfranchisement with your fellow leaseholders to purchase the freehold and take full control of your building
- Stay informed about implementation dates for the Leasehold and Freehold Reform Act 2024, as many provisions are being introduced through secondary legislation
- Take professional advice from a specialist leasehold solicitor or surveyor before making any claim, as the legal and valuation processes can be complex
For detailed guidance on each of these options, explore our specialist guides on lease extensions, right to manage, collective enfranchisement, and ground rent. Each guide explains the process, costs, and practical steps involved so that you can make informed decisions about your home.
Frequently Asked Questions About Leasehold Reform
Will leasehold be abolished in the UK?
The UK government has committed to reforming the leasehold system but has not abolished it outright. The Leasehold and Freehold Reform Act 2024 introduced significant changes to make the system fairer, including cheaper lease extensions, easier right to manage claims, and greater transparency over service charges. For new-build houses, leasehold has effectively been banned since 2022 under the Leasehold Reform (Ground Rent) Act, which restricts ground rent to a peppercorn on new leases. However, existing leasehold flats will continue under the leasehold system for the foreseeable future, with reforms aimed at strengthening leaseholder rights rather than replacing the tenure entirely. The government has signalled a long-term ambition to transition to commonhold, but no timetable has been set for mandatory conversion.
What is the new law for leaseholders?
The most recent legislation affecting leaseholders is the Leasehold and Freehold Reform Act 2024, building on the Leasehold Reform (Ground Rent) Act 2022 and the Building Safety Act 2022. Together, these laws introduce a range of protections: ground rent on new leases is capped at a peppercorn, the marriage value payable on lease extensions is being abolished, the standard lease extension term is being increased to 990 years, leaseholders in buildings over 11 metres gain protections from historical building safety costs, and the right to manage process is being simplified. Many provisions are being brought into force through secondary legislation in 2025 and 2026, so leaseholders should monitor official government guidance for implementation dates relevant to their situation.
What is the downside of leasehold?
Leasehold ownership comes with several significant disadvantages compared to freehold. The leaseholder does not own the land on which the property stands, and the lease is a wasting asset that decreases in value as the remaining term shortens. Leaseholders must pay ground rent to the freeholder, which may escalate over time under the terms of the lease. They are also liable for service charges to cover the cost of building maintenance and management, and they have limited control over how those funds are spent unless they exercise the right to manage. Selling a leasehold property with a short remaining lease can be difficult and expensive, as mortgage lenders typically require a minimum unexpired term. Lease extensions and enfranchisement claims can involve substantial legal and valuation costs. These structural disadvantages are the primary reasons behind ongoing calls for leasehold reform in the UK.
Why are leasehold flats being banned?
Leasehold flats have not been banned, but there is strong political and public pressure to reform the system because of widespread problems with excessive ground rents, opaque service charges, and the imbalance of power between freeholders and leaseholders. The ban that has been introduced applies to new-build leasehold houses, not flats, because houses can function perfectly well as freehold properties without the need for a shared management structure. Flats present a more complex situation because they share communal areas, structural elements, and services that require collective management. The government has promoted commonhold as an alternative tenure for flats, where each flat owner holds a freehold interest and the building is managed by a commonhold association, but uptake has been negligible since commonhold was introduced in 2002. Until commonhold becomes a practical and widely adopted alternative, leasehold will remain the standard tenure for flats in England and Wales.
Is leasehold going to be scrapped?
Leasehold is not going to be scrapped in the immediate future. The government has described its long-term goal as making leasehold ownership as fair and transparent as possible, with an eventual transition to commonhold for new flatted developments. However, scrapping leasehold entirely would require a workable alternative for the millions of existing leasehold flats in England and Wales, and commonhold has not yet proven itself at scale. The current reform programme focuses on incremental improvements: reducing the cost of lease extensions, abolishing marriage value, capping ground rents, improving right to manage access, and increasing transparency over service charges. These reforms address the worst aspects of leasehold without replacing the system altogether. Leaseholders should plan on the basis that leasehold will continue to exist, but with progressively stronger protections.
What is the 20 year lease rule?
The 20 year lease rule refers to the qualifying period that a leaseholder must have held their lease before they can make a statutory claim to extend it. Under the Leasehold Reform, Housing and Urban Development Act 1993, a leaseholder of a flat must have owned the lease for at least two years before serving a Section 42 notice to claim a lease extension. However, there is a separate and important consideration when the unexpired term of the lease falls below a certain threshold. When a lease has fewer than 80 years remaining, the leaseholder must pay marriage value to the freeholder as part of the extension premium, which significantly increases the cost. The term 20 year rule is sometimes used informally to describe the point at which a very short lease becomes extremely difficult to sell or mortgage, as most lenders will not offer a mortgage on a lease with fewer than 70 to 80 years remaining. The Leasehold and Freehold Reform Act 2024 proposes to abolish the two-year ownership requirement and remove marriage value from the calculation entirely, which would make lease extensions cheaper and faster for all qualifying leaseholders.
Need Help Navigating Leasehold Reform?
Whether you need advice on a lease extension, help exercising the right to manage, guidance on collective enfranchisement, or professional leasehold management for your building, Block is here to help. Our experienced team stays up to date with every aspect of leasehold reform to ensure you receive accurate, practical advice.