What does the new leasehold reform mean for you if you own a flat?

What is leasehold and why does it matter to flat owners?

If you own a flat in England or Wales, there is a good chance you are a leaseholder. This means you own the right to live in your home for a fixed period — usually 99, 125 or 999 years — but you do not own the land or the building itself. The freeholder (the company or person who does own the building) can charge you ground rent, service charges, and other fees for as long as you live there.

For many people, ground rent started out as a modest annual charge — perhaps £100 or £200 a year. But some leases include clauses that allow ground rent to double every ten or fifteen years. People who bought flats in the 2000s and 2010s in particular have found themselves with ground rents that have grown to £1,000, £2,000 or more a year — and which have made their properties difficult or impossible to sell or remortgage.

What did the government announce in the King’s Speech?

On 13 May 2026 — just yesterday — the government confirmed it will bring forward a Commonhold and Leasehold Reform Bill. This builds on the Leasehold and Freehold Reform Act 2024 and goes further, with four major proposals:

• A cap on ground rents at £250 a year — for all existing residential long leases in England and Wales
• A 40-year phaseout to zero — after the cap takes effect, ground rent will eventually drop to a peppercorn (effectively £0)
• Commonhold as the default tenure — new flats sold in future would be owned outright rather than via a time-limited lease
• Abolition of forfeiture — currently a freeholder can theoretically force you to lose your entire home over an unpaid ground rent bill. This would end.

How much could you actually save on ground rent?

The government estimates that between 770,000 and 900,000 leaseholders currently pay more than £250 a year in ground rent. Around 490,000 to 590,000 of these are in London and the South East, where ground rents have historically been highest.

If you currently pay £1,000 a year and it is capped at £250, that is a saving of £750 a year — or £7,500 over ten years. The government says many leaseholders will save more than £4,000 over the remaining term of their lease.

A practical step worth taking now: dig out your lease documents and check what your current ground rent is, and whether it includes a review clause. If you cannot find the documents, your solicitor from when you bought should have copies — or you can order them from HM Land Registry online for a small fee (usually £3 to £7 per document).

Can you extend your lease, and is it worth doing now?

One important change already in effect — introduced in February 2025 as part of the Leasehold and Freehold Reform Act — is that you no longer need to have owned your flat for two years before you can extend your lease. You can apply from the very day you buy the property.

This matters because a lease with fewer than 80 years remaining becomes significantly harder to sell and considerably more expensive to extend. If your lease has under 90 years left, it is worth taking advice sooner rather than later. When you extend your lease under the new statutory route, the ground rent is also reduced to a peppercorn — meaning you stop paying it altogether, right now.

You have two routes: negotiating informally with your freeholder, or using your statutory right to a 90-year extension on top of what remains. The statutory route gives stronger protections and sets the ground rent to zero. A specialist leasehold solicitor can advise which suits your situation. The Leasehold Advisory Service (LEASE) offers free initial guidance at lease-advice.org.

What is changing with service charges?

Service charges — which cover building maintenance, insurance, cleaning of communal areas and lift servicing — have long been a source of frustration for flat owners. In some London blocks, residents pay £5,000 a year or more, often with little transparency about where the money goes.

Since 2026, freeholders are required to use a standardised format for service charge invoices. You should now receive a clearer breakdown of costs, an annual performance report, and confirmation that any insurance commissions paid to the freeholder are fair and transparent.

If you believe your service charges are unreasonably high, you have the right to challenge them through the First-tier Tribunal (Property Chamber) — and the reforms limit the freeholder’s ability to make you pay their legal costs if you do so. LEASE can help you understand the process before you commit.

When will all these changes actually come into effect?

The honest answer is: not all at once. Some protections are already in place today. But the ground rent cap and the shift to commonhold are still working through Parliament and legal experts broadly expect them to come into force around 2028.

Here is a summary of what is already in force versus what is coming:

• Already in force (February 2025): You can extend your lease from Day One of ownership, and doing so eliminates your ground rent
• Already in force (2026): Standardised service charge invoices; leaseholders cannot be made liable for certain freeholder legal costs; more leaseholders can apply for Right to Manage
• Expected around 2028: Ground rent cap at £250; 40-year phaseout to zero; abolition of forfeiture; commonhold as default for new-build flats

If you own a leasehold flat and are concerned about your ground rent or the length of your remaining lease, the best thing you can do right now is get an up-to-date valuation and speak to a specialist. The reforms are coming — but you do not have to wait for them to start protecting yourself.