UK Government’s Draft Leasehold and Commonhold Reform Bill: A Summary for flat owners

Published on 27 January 2026, the Draft Commonhold and Leasehold Reform Bill represents the UK government’s plan to overhaul flat ownership in England and Wales. The bill aims to phase out the leasehold system and make commonhold the default form of ownership.

Key proposals

Commonhold as the new standard

The bill will ban leasehold for most new flats, making commonhold the default tenure. Under commonhold, flat owners will own their properties outright and jointly manage their buildings with other owners. The reforms will also help existing leasehold properties in England and Wales more easily extend their leases or acquire the freehold

Ground rent cap

For existing leaseholders, the bill proposes capping ground rents at £250 per year, reducing to a peppercorn (essentially zero) after 40 years.

Abolition of forfeiture

One of the most significant protections is the abolition of the threat of forfeiture, which currently allows landlords to terminate a lease if debts exceed £350 or remain unpaid for three years. The bill will introduce a new enforcement system to help protect both leaseholders and landlords.

Improved commonhold framework

The bill aims to modernise the commonhold framework to make it workable for more developments. Key improvements include clearer rules on development rights, building management, insurance, budgeting (for example maintenance of mandatory reserve funds), and an easier conversion process from leasehold to commonhold.

What happens next?

The draft bill is currently undergoing pre-legislative scrutiny by MPs, industry experts, and consumer groups to suggest improvements before the final legislation is introduced.

A full bill is expected to be presented to Parliament in 2027, and to come into force by the end of the current parliamentary term (2029).

Background

These reforms build on the Leasehold and Freehold Reform Act 2024, which was intended to make it cheaper and easier for leaseholders to extend their leases or buy their freehold. The draft bill represents the next step in the government’s commitment to modernise flat ownership in England and Wales

Judge & Priestley is tracking these proposals carefully to stay ahead of legislative changes and ensure our clients receive the most current, informed guidance and advice.

Written by Lewis Myatt, Associate Solicitor, Residential Conveyancing.

Please contact us on 020 8290 0333 or email [email protected] if you would like more information about the issues raised in this article or any aspect of Residential Conveyancing.

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