Leasehold Reform: What Flat Landlords Need to Know

If you own a leasehold flat as a buy-to-let, the reform agenda is moving faster than many landlords realise.

The government published the draft Commonhold and Leasehold Reform Bill in January 2026. Parliamentary scrutiny is under way. A consultation closes in less than two weeks. None of this means changes are imminent. But the direction of travel is clear, and several of the proposals will affect the value of your asset and your costs as a landlord when they do arrive.

Below is a breakdown of what has been proposed, what is confirmed versus what is still working through Parliament, and what flat landlords should be doing now.

What Is Leasehold Reform and Where Does It Stand?

Leasehold is the dominant form of flat ownership in England and Wales. When you buy a leasehold flat, you own it for a set term, typically 99 or 125 years when new, with the freehold interest owned separately. Over time that means ground rents, service charges controlled by a freeholder or managing agent, and a lease that gradually shortens.

The Leasehold and Freehold Reform Act 2024 made some changes. The government decided those changes did not go far enough, and in January 2026 published a full draft bill proposing a much more fundamental overhaul.

Published on 27 January 2026, the draft Commonhold and Leasehold Reform Bill is currently undergoing pre-legislative scrutiny. The Housing, Communities and Local Government Committee ran evidence sessions from early March through to 24 March 2026 and will publish its findings later in spring. The bill has not yet been formally introduced to Parliament. That step comes after the committee reports and the government responds.

On timing: realistic estimates put formal introduction later in 2026 and Royal Assent at no earlier than late 2026 or into 2027. For the most significant measures, particularly the ground rent cap, implementation is expected in late 2028 at the earliest, subject to parliamentary approval.

Running alongside the bill is a consultation on banning leasehold for new flats. It closes on 24 April 2026. If you have views on how the transition to commonhold should work, that is your window.

Ground Rent: What Is Changing

Ground rent is an annual charge paid by leaseholders to the freeholder. For many older leases, it is not fixed. Some ground rents are set to double every ten to twenty-five years, compounding the cost significantly and making certain properties unmortgageable as buyers' lenders refuse to lend against them.

The government's proposal in the draft bill is clear: ground rents will be capped at £250 per year. After 40 years, the cap reduces to a peppercorn, meaning effectively zero. The government estimates that between 770,000 and 900,000 leaseholders currently pay over £250 per year in ground rent. The cap is expected to come into force in late 2028, subject to parliamentary approval.

For buy-to-let landlords this matters in two ways. First, if your flat carries a high or escalating ground rent, you are paying a cost that eats into your net yield today. Second, when you come to sell, a high ground rent is a red flag for buyers and their mortgage lenders. A cap at £250 removes the escalation risk for future owners, but that benefit is two or more years away. Until then, your lease remains subject to whatever the current terms say.