Leasehold Reform: Where Things Stand in July 2026

The government has just confirmed it will miss its own deadline on leasehold reform, and this time it says so itself.

Housing Minister Matthew Pennycook has written to the Housing, Communities and Local Government Committee to say the department will not meet the 27 July 2026 deadline for its formal response to the Committee's leasehold reform report. The reason given is the disruption caused by Keir Starmer's resignation as Prime Minister on 22 June. The response, Pennycook says, will not land before Parliament rises for summer recess on 16 July. That pushes any formal reply into September at the earliest.

If you own a leasehold flat as a buy-to-let, this matters less for what it changes today and more for what it tells you about the pace of reform. Nothing here alters your lease, your ground rent, or your service charge this week. But the timeline for when it might has slipped again, and it is worth being clear-eyed about what that means for decisions you might be weighing, particularly around lease extensions.

For the full picture of what the reforms will eventually mean for flat landlords, see our leasehold reform guide. Here is where things actually stand today.

The Missed Deadline

Some background first. The Committee published its pre-legislative scrutiny report on the draft Commonhold and Leasehold Reform Bill on 27 May 2026. Under the usual convention, government has sixty days to respond formally, which put the deadline at 27 July.

On 8 June, the Housing Minister sent an interim letter acknowledging the report, but that was not the formal response. The formal response is the one that matters: it sets out which of the Committee's recommendations government accepts, rejects, or will consider further, and it is normally the step that clears the way for a bill to be introduced to Parliament.

That formal response is now delayed. Pennycook's letter puts the blame squarely on the change of Prime Minister. Florence Eshalomi, the Committee's chair, has said millions of leaseholders have already waited too long and has urged the incoming administration to commit early to bringing the final bill forward, ideally by autumn 2026, once the recess ends.

Whether autumn 2026 holds is genuinely uncertain. The pattern so far, a draft bill in January, a scrutiny report in May, an interim letter in June, and now a missed deadline in July, suggests each stage of this process runs later than the one before it.

What the Committee Actually Recommended

The Committee's May report was broadly supportive of the direction of the draft bill but pushed for the government to go further and move faster. Its main recommendations included:

• Strengthening the ground rent cap provisions to ensure they are genuinely effective, rather than leaving room for avoidance
• Bringing the ground rent cap into force sooner than the government's current default expectation
• Creating an independent regulator for property managing agents, something the draft bill does not currently include
• Pressing for the final bill to be introduced in autumn 2026 rather than allowed to drift further

None of these recommendations are binding. The government can accept, partially accept, or reject each one in its formal response, whenever that response finally arrives.

The Quid Pro Quo Consultation: A Different Thing Entirely

Separately, and easy to confuse with the main response, the government launched a consultation on 2 July 2026 about so-called "quid pro quo" leases. It closes on 27 August, running for eight weeks.

The question it is asking: where a leaseholder originally agreed to a higher ground rent in exchange for paying a lower purchase price for the flat, should that lease be treated differently, or exempted, from the proposed £250 ground rent cap? The concern is that a blanket cap could hand some leaseholders an unearned windfall if they knowingly traded a lower purchase price for a higher ground rent at the point of sale.

This consultation is not the Committee response, and it is not a sign the main bill is progressing. It is a narrower, technical question about one edge case within the cap, and it will not close until after the summer recess in any case.

What Is Already Law, and What Isn't

With so much still in draft, it is worth being precise about what has actually changed and what hasn't, because the two get blurred easily.

Already in force:

• Ground rent on new leases has been capped at a peppercorn (effectively zero) since the Leasehold Reform (Ground Rent) Act 2022 took effect on 30 June 2022. If you bought a new-build flat after that date, this already applies to you.
• Since 31 January 2025, under the Leasehold and Freehold Reform Act 2024, the two-year ownership rule for statutory lease extensions has been abolished. You no longer need to have owned your flat for two years before you can extend the lease.
• The non-residential floorspace threshold for exercising the Right to Manage has been raised from 25% to 50%, since March 2025. More mixed-use buildings, those with shops or offices on lower floors, now qualify for leaseholders to take over management.

Not yet in force, despite being passed into law in 2024:

• The abolition of marriage value on lease extensions below 80 years
• The extension of statutory lease terms to 990 years (up from 90 years for flats)

Both require the government to commence secondary legislation, and both are tied up in an ongoing legal challenge. A group of freeholders argued these reforms unlawfully interfere with their property rights. The High Court dismissed that challenge in October 2025, finding the measures had "robust justification." Several freeholder groups have since been granted permission to appeal. No Court of Appeal hearing date has been fixed yet, and legal commentators expect a hearing in late 2026 or into 2027 depending on whether it is expedited.

Still only proposed, in the draft bill:

• Capping ground rent on existing leases (those granted before 30 June 2022) at £250 a year, reducing to a peppercorn after 40 years
• Making commonhold the default tenure for new-build flats
• Abolishing forfeiture and replacing it with a proportionate enforcement scheme

What This Means If Your Lease Is Getting Short

This is the part landlords tend to ask about directly: should you extend your lease now, or wait for reform to make it cheaper?

The honest answer is that waiting carries its own risk. Marriage value, the extra premium payable when a lease falls below 80 years, has not been abolished. It remains the current law today, and it will keep applying until the government commences those provisions, which cannot happen while the litigation is unresolved. Nobody currently has a reliable date for when that will be. Practitioner estimates range from late 2026 at the very earliest to 2027 or 2028 as arguably more realistic, and that is before accounting for whatever the Court of Appeal decides.

If your lease is approaching 80 years, get a premium estimate now from a leasehold solicitor or through LEASE, the government-funded Leasehold Advisory Service, at lease.org.uk. The cost of extending rises sharply as you cross that threshold, and holding out for a change in the law that has no confirmed date is a gamble, not a plan.

If your lease has plenty of years left, there is less urgency, but keep an eye on developments. A shift in the ground rent cap timing, a Court of Appeal ruling, or the eventual government response could all move the picture in the next twelve months.

What to Watch For

• The delayed formal response. No new date has been confirmed. Expect it after Parliament returns from recess on 1 September, though even that is not guaranteed given how the timeline has slipped before.
• The Court of Appeal ruling on the freeholders' challenge to marriage value abolition and the 990-year extension terms. This is the gating issue for whether those 2024 reforms can be commenced at all.
• Whether the final Commonhold and Leasehold Reform Bill is introduced in autumn 2026, as the Committee has pushed for. Given the pattern of delay so far, treat "autumn" as an aspiration rather than a fixed date until you see an actual first reading in Parliament.
• The quid pro quo consultation outcome, closing 27 August, which will feed into the final shape of the ground rent cap exemptions.

This article is for informational purposes only and does not constitute financial or investment advice. Tax rules and legislation change frequently. Always verify current rates with HMRC or GOV.UK and seek independent professional advice before making investment decisions.