Leasehold and Freehold Reform: What landlords need to know

For years, consumer groups and policymakers have argued that the UK’s leasehold system is inherently unfair. Landlords and property owners have routinely faced steep ground rents, expensive lease extensions, unmortgageable short leases, and poor management by freeholders or external companies.

Change is finally underway. Following the 2022 restriction of ground rents on new leases to zero, the Leasehold and Freehold Reform Act 2024 was passed in May 2024. While only a few measures are currently live, the recent King’s Speech in May 2026 outlined a brand-new Bill to accelerate these changes.

Here are the 5 essential updates on recent and future reforms, and exactly what they mean for your property investments:

5 key legislative changes for landlords

1. No more 2-year wait to extend leases or buy the freehold

As of February 2025, leaseholders no longer need to own a property for two years before applying for a lease extension or buying the freehold.

• The Landlord Benefit: If you purchase an investment property with a short lease, you can add value to it almost immediately. This gives you faster access to flexible financing options, such as:
  • Securing mortgages on previously unmortgageable properties.
  • Reducing your Loan-to-Value (LTV) ratio.
  • Pulling out equity early to reinvest elsewhere.
• Note: You still cannot take formal action until your ownership is officially updated at the Land Registry, so expect a brief post-purchase delay.

2. Easier "Right to Manage" (RTM) fast-tracks

Significant updates to the Right to Manage regime came into force in March 2025. These reforms make it much easier for leaseholders to band together, take control of building management, and limit the circumstances where freeholders can reclaim legal costs from you.

The landlord benefit: If your building is poorly maintained, you and the other flat owners can set up your own management company. Efficiently run buildings mean happier, long-term tenants, safer properties, and the potential to command higher monthly rents.

3. The upcoming Leasehold and Commonhold Reform Bill

The King confirmed last month that this new Bill will be introduced to Parliament during the current session. Its core proposals include:

• Banning leasehold for the majority of new flats, making "commonhold" the default instead.
• Capping existing ground rents at £250 per year, which will automatically drop to a "peppercorn" rent (zero) after 40 years.
• Amending the 2024 Act to make buying a freehold or extending a lease even cheaper and simpler.
• The landlord benefit: While these changes will take some time to pass into law, they promise incredible long-term peace of mind. Future flat investments will offer far greater security of ownership, and your existing leasehold portfolios will benefit from capped, predictable ground rent costs.

4. Completed Government consultations (awaiting responses)

The Government has concluded three major consultations and will soon reveal how it plans to implement protections across the following areas:

• Freehold estates: Introducing consumer protections, service charge regulations, and legal cost controls for homeowners on freehold estates.
• Banning opaque insurance commissions: Stopping freeholders and managing agents from charging leaseholders excessive, hidden building insurance commissions. This ensures you only pay fair, transparent insurance costs.
• Stronger charge protections: Tightening rules around service charges, litigation costs, building insurance, managing agent regulations, and the formal consultation process required before major works can begin.

5. Lined-up reforms: Massive extensions and greater accountability

Several other major elements of the Leasehold and Freehold Reform Act will roll out progressively over time:

• 990-year extensions: Standard lease extension terms will skyrocket from the current 50 or 90 years up to 990 years, offering ultimate security of tenure.
• Mandatory redress schemes: Freeholders who manage their buildings directly will be legally required to join a redress scheme, making it easy to hold them accountable for failures.

Fast-track sales information: Freeholders will face maximum legal time limits to supply management packs during a property sale. This will eliminate costly delays that hit landlords with lost rental income while waiting to complete.

Thinking of buying a leasehold property right now?

While the remaining legislation works its way through Parliament, protect your investment today by taking these three steps:

1. Check the lease length: If it is under 100 years, instruct your conveyancer to calculate the exact costs and terms required to extend it.
2. Review the sinking fund: Ensure there is a healthy cash reserve in place to cover large-scale maintenance works in the near future.
3. Scan for restrictions: Check for any specific lease clauses that restrict structural alterations, subletting, or letting to tenants with pets.

Need more information?

The Government has published a comprehensive "toolkit" on its website detailing all upcoming reforms, advice, and support pathways.

We’re here to help

Whether you are looking to expand your portfolio with a new investment flat or want hands-on, compliant management for an existing property, our team is ready. Get in touch with your local branch today to speak with one of our lettings experts.

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