The Government has announced major proposals to reform the leasehold system in England and Wales, publishing the draft Leasehold and Commonhold Reform Bill on 27th January 2026. The changes are intended to reduce costs, improve fairness and give homeowners greater long-term security.
If you already own a leasehold property, or are thinking about buying one, the proposals could have a meaningful impact.
Ground Rent Changes
One of the most significant proposals is a cap on ground rent under existing residential leases.
Under the draft Bill:
- Ground rent would be capped at £250 per year.
- After 40 years, ground rent would reduce to a peppercorn, effectively zero.
- The changes would apply to most leases entered into before July 2023.
For many existing owners, this could mean lower long-term costs and greater certainty over future payments. For buyers, it may make leasehold property more attractive and easier to budget for.
Moving Towards Commonhold
The Government has also confirmed plans to move away from traditional leasehold ownership for many residential developments.
The Bill proposes:
- Ending the creation of new leasehold developments once a reformed commonhold system is in place.
- Making it easier for existing leaseholders to convert to commonhold.
- Strengthening commonhold so homeowners have greater control over shared areas and decision-making.
For buyers, this signals a long-term shift in how residential property is owned and managed.
Stronger Protection for Homeowners
The proposals also include:
- Ending the risk of losing a home through forfeiture for small or disputed debts.
- Greater transparency around service charges and estate management fees.
- Stronger rights for homeowners to understand and challenge ongoing charges.
These measures are designed to address some of the most common concerns raised by leaseholders.
What Happens Next
The Bill is now subject to consultation and parliamentary scrutiny, so further detail will follow on timing and implementation. However, the direction is clear: leasehold ownership is being rebalanced in favour of homeowners, with a focus on fairness, clarity and long-term security.
Milne Moser Solicitors will continue to monitor developments and provide practical advice to buyers and existing owners as the reforms progress.
If you are buying a leasehold property or would like to understand how these changes could affect your home, our residential property team is here to help.
