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Leasehold Reform in the UK: What Flat Buyers Need to Know

5 minute read · 1 July 2026 · By the Agreed team

Leasehold reform is moving closer to law, with proposals to ban new leasehold flats, cap ground rents, and introduce commonhold as the default tenure. If you are buying or already own a leasehold flat, here is what the changes mean for you in plain English.

Millions of people in England and Wales own their home on a leasehold basis, meaning they own the property for a fixed term but not the land beneath it. For years, that arrangement has caused real problems, including escalating ground rents, disputed service charges, and the ever-present threat of forfeiture. Now, draft legislation proposes the most significant overhaul of property ownership in decades. Here is what you need to understand before you buy, sell, or simply sit tight.

What Leasehold Actually Means and Why It Has Been Controversial

When you buy a leasehold flat, you purchase the right to live there for the remaining years on the lease, commonly 99, 125, or 999 years at the outset. The freeholder retains ownership of the building and land, and can charge you ground rent, an annual sum that sometimes doubles every ten years under older leases, as well as service charges for maintenance of shared areas.

The controversies are well documented. Some ground rent clauses meant homeowners found their properties unmortgageable almost overnight. Service charge disputes are notoriously difficult and expensive to resolve. Perhaps most alarming is forfeiture, a legal mechanism that allows a freeholder to repossess your entire property, even one worth hundreds of thousands of pounds, if you fall into relatively minor arrears. Critics have long argued this is disproportionate and open to abuse.

What the Draft Commonhold and Leasehold Reform Bill Proposes

The draft Bill, expected to reach the statute book by late 2028 at the earliest, contains several major proposals:

Banning new leasehold flats, with commonhold becoming the default tenure for all new-build flats in England and Wales.
Capping existing ground rents at £250 per year for a 40-year transitional period, before reducing them to a peppercorn, effectively zero, thereafter.
Abolishing forfeiture. Freeholders would lose the right to seize a property outright for arrears, removing one of the most punitive aspects of the current system.
Giving leaseholders new rights to request improvements to their property without needing freeholder consent in every instance.

It is important to note these are proposals contained within a draft Bill. Speak to your solicitor about the current legal position before exchanging contracts on any property.

What Is Commonhold and How Does It Differ?

Commonhold is a form of ownership already used in Australia, Canada, and much of Europe, but it has rarely been adopted in England and Wales since it was introduced here in 2002. Under commonhold, each flat owner holds the freehold of their individual unit outright. Shared areas, such as hallways, roofs, and gardens, are collectively owned and managed through a Commonhold Association, a company in which every flat owner automatically holds a share.

The key differences from leasehold are:

No ground rent and no freeholder profiting from the land beneath your home.
No lease term counting down. Your ownership does not expire.
Decisions about the building are made democratically by the residents themselves.
Service charges still exist to fund maintenance, but residents have direct control over how money is spent.

In short, commonhold aligns ownership more closely with what most people think they are buying when they purchase a flat.

Should You Still Buy a Leasehold Flat Today?

This is the question buyers are asking most often, and there is no single answer. What is clear is that the market has already started to price in uncertainty. Zoopla data shows flats are the only property type recording falling prices nationally, down 1.3% year on year, partly reflecting buyer caution around leasehold tenure.

That does not mean leasehold flats are unsaleable or a bad investment. Location, lease length, and service charge history still matter far more in practice. However, there are specific risks to weigh:

A short lease, under 80 years, can make a property harder to mortgage and more expensive to extend.
High or escalating ground rents may deter future buyers.
Ongoing service charge disputes can affect saleability and your quality of life while you own the property.

If reform proceeds as planned, some of these risks will reduce over time. However, legislation moves slowly, and you will be living with the current rules in the meantime.

Questions to Ask Your Solicitor Before You Exchange

Before committing to a leasehold purchase, make sure your solicitor has reviewed the following and given you clear answers:

How many years remain on the lease, and what is the estimated cost of extending it?
What is the current ground rent, and does the lease contain any escalation clauses?
What are the annual service charges, and has there been any history of disputes or major works demands?
Is the freeholder a reputable, regulated company or a private individual?
Does the lease contain any unusual restrictions on subletting, alterations, or pet ownership?

Leasehold reform represents genuine and meaningful progress, but it will take years to take full effect. In the meantime, a thorough conveyancing review remains the most important step you can take to protect yourself.