What is the ground rent cap and when does it apply?

Ground rents on new residential leases in England and Wales were capped at zero (a peppercorn) by the Leasehold Reform (Ground Rent) Act 2022 for regulated leases granted on or after 30 June 2022. The draft Leasehold Reform Bill 2026 proposes to extend controls to existing leases, but at the time of publication the Bill has not received Royal Assent and no commencement date for these retrospective provisions has been set.

What does the Leasehold Reform Bill 2026 propose to change?

The draft Leasehold Reform Bill 2026 is the government's follow-up to the Leasehold and Freehold Reform Act 2024. Key proposals include making commonhold the default tenure for new residential flats, extending ground rent controls to existing leases, strengthening leaseholder rights to extend leases and buy freeholds at lower cost, and reforming service charge transparency requirements. As a draft Bill, all provisions are subject to parliamentary amendment.

What is commonhold and how is it different from leasehold?

Commonhold is a form of property ownership for flats and buildings with shared parts. Under commonhold, each flat owner owns their unit outright (freehold) and is a member of a Commonhold Association that owns and manages the common parts. There is no landlord, no ground rent, and no lease expiring — ownership is permanent. It has existed in English law since 2002 but has barely been used because mortgage lenders and developers preferred leasehold. The reform proposals aim to make commonhold the default for new builds.

Can existing leaseholders benefit from the 2026 reform proposals?

The draft proposals include mechanisms for existing leasehold blocks to convert to commonhold where a majority of leaseholders vote to do so, and for individual leaseholders to extend leases or purchase their freehold on more favourable terms than under the current system. However, these provisions require Royal Assent and secondary legislation before they take effect. Existing leaseholders should monitor the Bill's progress and seek legal advice before taking action in anticipation of reforms that have not yet been enacted.

What already changed for leaseholders under the 2024 Act?

The Leasehold and Freehold Reform Act 2024 made several changes that are now in force: it extended the standard lease extension term from 90 to 990 years for both houses and flats, removed the two-year ownership requirement before claiming a statutory lease extension or enfranchisement, abolished marriage value in most enfranchisement calculations, and improved the transparency of service charge information that freeholders must provide. Some provisions have commencement dates pending secondary legislation — check the current GOV.UK guidance.

Ground Rent Cap and Commonhold: What the 2026 Leasehold Reform Bill Really Changes

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Leasehold reform in England and Wales is coming in layers. Some changes are already law. Others are in a draft Bill that has not yet completed its parliamentary passage. Knowing which provisions are in force, which are coming, and which are still proposals is essential for anyone buying, selling, or advising on leasehold property.

This article separates what is already law from what is still a proposal, explains how commonhold differs from leasehold, and sets out what leaseholders and freeholders should do right now.

What is already law: the 2022 and 2024 Acts

Leasehold Reform (Ground Rent) Act 2022

Ground rents on new regulated leases were capped at zero (a peppercorn) from 30 June 2022. This applies to:

New residential long leases (over 21 years) in England and Wales
Including voluntary lease extensions on existing leases

Ground rents on leases granted before 30 June 2022 are not covered by this Act. Existing leaseholders with ground rent clauses — including escalating "doubling" ground rents — remain subject to their existing lease terms until further legislation changes this.

Leasehold and Freehold Reform Act 2024

The Leasehold and Freehold Reform Act 2024 made several significant changes, some already in force and some pending commencement orders:

990-year standard extension — lease extensions for houses and flats now run for 990 years (up from 90 for flats, replacing the different rules for houses)
Two-year ownership rule abolished — leaseholders can claim a statutory lease extension or enfranchisement without having owned the property for two years first
Marriage value abolished — the "marriage value" premium in enfranchisement valuations for leases under 80 years has been removed for most cases, reducing the cost of buying a freehold
Service charge transparency — freeholders must provide more detailed annual service charge accounts in a prescribed format
Forfeiture reform — certain protections against lease forfeiture for minor arrears have been strengthened

Check the GOV.UK guidance on the 2024 Act for the current commencement status of individual provisions.

What the draft Leasehold Reform Bill 2026 proposes

The draft Leasehold Reform Bill 2026 is the next stage. It has not yet received Royal Assent. Key proposals include:

Commonhold as default for new residential blocks

The Bill proposes to make commonhold the mandatory tenure for new residential flat developments in England and Wales. New blocks would no longer be able to create leasehold titles — each flat would be owned outright by the unit owner, with the building's common parts owned and managed by a Commonhold Association.

This is a major structural change. Mortgage lenders will need to adapt their lending criteria (many have historically been reluctant to lend on commonhold). New-build developers will need to restructure their conveyancing processes.

Conversion of existing blocks to commonhold

The Bill proposes a mechanism for existing leasehold blocks to convert to commonhold, requiring a qualifying majority of leaseholders to vote in favour. The threshold and process are still subject to parliamentary amendment.

Ground rent controls on existing leases

The most contested proposal is the extension of ground rent controls to existing pre-2022 leases. The government has proposed a cap, but the level, mechanism, and compensation arrangements for freeholders have not been finalised. Freeholders with significant portfolios of ground rent income are contesting this proposal.

No commencement date for retrospective ground rent controls has been set. This provision will require careful drafting to survive legal challenge.

What is commonhold and why does it matter?

Commonhold was introduced in England and Wales under the Commonhold and Leasehold Reform Act 2002, but has barely been used — fewer than 50 commonhold developments exist in England and Wales, compared with millions of leasehold flats.

Under commonhold:

Each flat owner holds their unit as freehold — there is no lease, no ground rent, and no expiry date
A Commonhold Association (a company in which all unit owners are members) owns the common parts — corridors, lifts, roof, foundations
The Association is governed by a Commonhold Community Statement setting out the rules and maintenance obligations
There is no landlord to whom escalating service charges or management fees are paid
Disputes go through the Association's decision-making process, not to a freeholder

The transition from leasehold to commonhold is complex. Existing mortgage lenders, valuers, and conveyancers have decades of experience with leasehold and relatively little with commonhold. The reform proposals include a period of lender engagement and guidance before new-build commonhold becomes mandatory.

What leaseholders should do now

Check your ground rent position. If your lease pre-dates June 2022 and contains a doubling ground rent clause, you are not protected by the 2022 Act. Legal advice is worth taking, particularly if you are planning to sell.
Consider a lease extension under the 2024 Act terms. The abolition of marriage value and the removal of the two-year ownership requirement make extensions cheaper than before. If your lease is below 80 years, extending now is generally sensible before mortgage lenders start declining applications.
Check service charge accounts. The 2024 Act improved transparency requirements. Leaseholders who have been receiving inadequate accounts should request compliant accounts from their freeholder.
Monitor the 2026 Bill. Do not take action in anticipation of provisions that are not yet law — particularly on ground rent controls. The Bill's final form may differ materially from the draft.

How leasehold data supports buyers and advisers

Buyers of leasehold property need to know the key lease terms before making an offer — not after paying survey and legal costs. The most important data points include:

Unexpired lease term
Ground rent amount and escalation clause
Service charge history and structure
Whether the building is within scope of the Building Safety Act

The Homedata Leasehold Data API returns lease term and ground rent information from HM Land Registry title registers, enabling pre-offer due diligence at scale. See also our guide on material information requirements for property listings, which includes tenure disclosure obligations.

Try this: leasehold due diligence by UPRN

The Homedata Leasehold Data API returns unexpired lease terms, ground rent data, and freehold ownership from Land Registry title data. Pass a UPRN or address to retrieve the key fields before instructing solicitors. Get a free API key or see the documentation.