Key updates from the 2026 Draft Commonhold and Leasehold Reform Bill

Major new leasehold reforms were unveiled on 27 January 2026 with the publication of the Draft Commonhold and Leasehold Reform Bill. The proposals mark another significant step toward dismantling what the Government has described as England and Wales’ “feudal” leasehold system, with wide‑ranging implications for both existing and future homeowners.

Key reforms announced

• Ground rent cap:  Ground rents for existing long leases will be capped at £250 per year, reducing to a peppercorn after 40 years. Many leaseholders are expected to save more than £4,000 over the life of their lease.
• Ban on new leasehold flats:  The sale of new leasehold flats will be prohibited, making commonhold the default tenure. Flat owners will collectively own and manage their building.
• Abolition of forfeiture:  The current system, where leaseholders risk losing their home over debts as low as £350, will be replaced with a fairer, court‑led enforcement process.
• Easier conversion to commonhold:  The threshold for converting an existing building to commonhold will drop from unanimous consent to 50% of qualifying leaseholders.
• End of certain enforcement powers:  Harsh enforcement powers linked to estate rent charges will be repealed, preventing homeowners from losing their property over missed maintenance fees.
• The draft bill is currently undergoing pre‑legislative scrutiny by the Housing, Communities and Local Government Committee. The Government has indicated that the ground rent cap may not fully take effect until late 2028, pending further secondary legislation.
• A public consultation on the transition to commonhold is open until 24 April 2026.

Timelines and next steps

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