Leasehold reform 2026: what it means if you're selling a flat
Published 27 May 2026 · 7 min read · By Evren Ergin
The draft Commonhold and Leasehold Reform Bill was published on 27 January 2026 and confirmed in the King's Speech on 13 May 2026. It caps ground rents, makes commonhold the default for new flats, and is expected to start taking effect from late 2028, so leasehold flats sold in 2026 still trade under the current rules.
TL;DR
- •The Commonhold and Leasehold Reform Bill was published in draft on 27 January 2026 and confirmed in the King's Speech on 13 May 2026.
- •The headline reform is a £250 annual cap on ground rent for existing leases, falling to a peppercorn after 40 years.
- •Commonhold is expected to become the default tenure for new flats from around 2029, with no immediate effect on existing leasehold sales.
- •Sellers of leasehold flats in 2026 should not wait. Short leases still need extending, and the current rules still apply at point of sale.
About 5 million homes in England are leasehold, and the vast majority of them are flats. The Commonhold and Leasehold Reform Bill is the biggest change to how those flats are owned in a generation. The draft text and the King's Speech have set the direction. The dates, the detail, and the small print are still being settled.
What is leasehold reform, in plain English?
Leasehold is a form of ownership where you own the right to live in a property for a fixed number of years, but the building and land sit with a freeholder. Reform is the government's plan to end that structure for most new flats and to limit what freeholders can charge on existing leases.
The replacement is commonhold. Commonhold is a system where residents own their flat outright and jointly own the building and the land through a residents' association.
What does the draft Bill actually propose?
Key proposals in the draft Commonhold and Leasehold Reform Bill 2026
| Proposal | What it changes | Who it affects |
|---|---|---|
| £250 annual cap on ground rent | Caps the maximum ground rent payable on existing leases. Reduces to a peppercorn (£0) after 40 years. | All existing leaseholders in England and Wales. |
| Commonhold as the default for new flats | Stops most new flats being sold as leasehold. New blocks built and sold as commonhold instead. | Buyers of new-build flats from around 2029. |
| Easier conversion to commonhold | Lowers the threshold to convert an existing block from leasehold to commonhold from unanimous consent to 50% of leaseholders. | Leaseholders in existing blocks who want to take collective control. |
| Lease extension and enfranchisement changes | Already part of the 2024 Leasehold and Freehold Reform Act. Commencement dates still being staged. | Anyone with a short lease in 2026. |
| Ban on new leasehold flats | Government policy intent, with the legislative mechanism being drafted. Date beyond the current Parliament likely. | Developers and future flat buyers. |
When does each part of the reform actually take effect?
Reform timeline as understood in May 2026
| Stage | Status | Expected date |
|---|---|---|
| Draft Bill published | Complete | 27 January 2026 |
| Bill confirmed in King's Speech | Complete | 13 May 2026 |
| Bill introduced to Parliament | Pending | Later in 2026 |
| Royal Assent | Pending | 2027 at earliest |
| Most provisions come into force | Pending | Late 2028 at earliest |
| Commonhold default for new flats | Pending | Around 2029 |
These dates are best-available estimates. Housing Minister Matthew Pennycook said in April 2026 that the government will publish commencement dates for all remaining parts of the 2024 Act and the new Bill by the end of this Parliament. Until that schedule lands, the current law still governs every flat sale that happens in 2026.
Frequently asked questions about the 2026 leasehold reform
Should I wait for the reform before selling my leasehold flat?
Probably not. The main provisions of the Bill are not expected to take effect until late 2028 at the earliest, and the commonhold default for new flats is targeted for around 2029. Waiting two or three years to sell on the chance of a higher price is a long bet with a lot of unknowns, including interest rates, your lease length, and your own life timing.
Will leasehold reform make my flat worth more or less?
It is too early to tell. In theory, capping ground rent at £250 a year removes a known drag on flat values, which should help. In practice, buyers and lenders will look at how the reform is implemented, what the freeholder still controls, and how the wider market is moving. The biggest single driver of your flat's value in 2026 remains the local market, not the reform timeline.
Do I still need to extend a short lease in 2026?
Yes. If your lease is under 80 years, it is already harder to sell and harder to mortgage, because of a one-off cost called marriage value that adds to the extension premium. The 2024 Leasehold and Freehold Reform Act abolished marriage value in principle, but the commencement date for that change has not been confirmed. Until it lands, waiting could cost you more than acting now.
What is commonhold in plain English?
Commonhold is a way of owning a flat where you own your flat outright with no time limit, and you jointly own the building and the land with the other flat owners through a residents' association. There is no freeholder. There is no ground rent. There is no lease running down. Commonhold has existed in England since 2002, but only a handful of buildings have ever used it.
Does the £250 ground rent cap apply to my existing lease yet?
Not yet. The £250 cap is in the draft Bill, not yet in law. Until Parliament passes the Bill and the relevant section is commenced, your ground rent is what your lease says it is. If you are paying a doubling ground rent or a high fixed amount, the existing 2022 Leasehold Reform (Ground Rent) Act already protects most new leases from June 2022, but it does not retroactively change older leases.
Will the reform affect freehold house sellers?
Mostly no. The Bill focuses on leasehold flats and the eventual move to commonhold. Freehold house sellers are largely unaffected, although a separate workstream is looking at fleecehold estate-management charges on newer freehold houses, which is being treated as a follow-up reform.
What should sellers of leasehold flats do in 2026?
Three things, in this order.
- Check your lease length today. If it is under 90 years, get a written extension quote before listing. Buyers and lenders look at this first.
- Get more than one valuation and compare what each agent says about your specific lease terms. A good local agent will price the lease in, not around it.
- Brief your conveyancer early. Leasehold sales need a management pack from the freeholder or managing agent, and it can take 4 to 8 weeks to arrive. Order it the day you instruct your solicitor.
Reform is coming, but the dates are years away. The flat you sell in 2026 is sold under the rules that exist in 2026.
How ValuQ helps leasehold sellers compare agents
ValuQ gives UK homeowners free, side-by-side property valuations from competing local estate agents. For a leasehold flat that means seeing exactly how each agent prices the lease, what they think it will sell for in today's market, and what they propose to do about the longer conveyancing window. The seller stays anonymous until they choose an agent, so there are no cold calls before the comparison is complete.
Sources
- [1]House of Commons Library research briefing on leasehold reform · 2026-05-15 · https://commonslibrary.parliament.uk/research-briefings/cbp-10653/
- [2]HomeOwners Alliance leasehold reform update · 2026-05-14 · https://hoa.org.uk/advice/guides-for-homeowners/for-owners/leasehold-reform/
- [3]Travers Smith analysis of the 2026 King's Speech · 2026-05-13 · https://www.traverssmith.com/knowledge/knowledge-container/real-estate-aspects-of-the-kings-speech/
- [4]Estate Agent Today report on MPs urging acceleration of leasehold reform · 2026-05-27 · https://www.estateagenttoday.co.uk/
- [5]Baker McKenzie briefing on the Commonhold and Leasehold Reform Bill · 2026-03-15 · https://www.bakermckenzie.com/en/insight/publications/2026/03/united-kingdom-commonhold-and-leasehold-reform-bill
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