The Leasehold and Freehold Reform Act received Royal Assent in May 2024 amid considerable fanfare. Ministers called it a generational overhaul. Campaigners, who had spent years documenting service charge abuse, ground rent escalation clauses and the near-impossibility of enfranchisement, allowed themselves a cautious exhale. Two years on, the picture is considerably more complicated. This leasehold reform UK update 2026 is an attempt to cut through the noise and establish, plainly, what has actually changed for the roughly five million leasehold households in England and Wales.
What the Act actually delivered
The most concrete wins are also the most limited. Ground rents on new residential leases are now capped at a peppercorn, effectively zero, which closes off the most egregious of the financial traps that caught out buyers in the 2010s. The Act also extended the standard lease extension term from 90 years to 990 years, making those extensions far more meaningful in practice. Leaseholders in houses (not just flats) now have the same right to enfranchisement as flat owners, which is a genuine structural change.
Transparency around service charges has improved on paper. Management companies must now issue a standardised annual report, and leaseholders have a clearer right to challenge unreasonable charges at the First-tier Tribunal. I’ve spoken to several property lawyers who describe this as helpful but not transformative; the tribunal process remains slow, expensive relative to the sums being disputed, and not exactly accessible to someone managing a full-time job and a mortgage.
Which promises have quietly stalled
The bigger pledges are where things get uncomfortable. The Act originally included provisions to abolish leasehold for new-build houses entirely. That commitment remains on the statute books but has not yet been brought into force by secondary legislation. Ministers have cited the complexity of the conveyancing transition as the reason for the delay. Critics, including the Leasehold Advisory Service, point out that developers have used this window to continue selling new houses on long leasehold terms to buyers who may not fully understand what they are signing.
The reform of the enfranchisement valuation formula, the calculation that determines what leaseholders must pay to buy their freehold, was supposed to be central to the Act. A new formula was promised that would strip out the so-called marriage value (the premium developers claim for combining the lease and freehold interests). This has not been enacted. The Law Commission produced its recommendations years ago. The political will to push them through secondary legislation appears, at present, to be elsewhere. For leaseholders in older buildings with shorter leases, this delay is not abstract; it means the cost of buying their freehold remains punishingly high.
The loopholes developers are still using
New-build flats remain leasehold. The Act does not change this, and there is no current timetable for doing so. Several major developers, including Barratt and Taylor Wimpey, have made public commitments to sell freehold where possible, but flat conversions and high-rise developments continue to be sold on long leasehold terms. That is, architecturally, somewhat defensible for multi-occupancy buildings where shared ownership of the freehold is genuinely complex. What is less defensible is the continued use of service charge structures that bear little relationship to actual maintenance costs.
I’ve read through tribunal decisions from the past twelve months and the pattern is striking. Managing agents, often subsidiaries of the same developer group that sold the property, continue to charge administration fees, insurance commissions and “management oversight” premiums that the new transparency rules have made more visible but have not eliminated. Visibility is not the same as accountability.
There is also the question of new-build leases with clauses that fall just below the thresholds the Act targets. Ground rents at a peppercorn are now standard, but some leases contain variable service charge formulas tied to inflation indices that can compound significantly over time. These are not technically banned. Buyers’ solicitors are meant to flag them; whether they always do is another matter.
What leaseholders can realistically expect next
The Government has indicated that secondary legislation on the enfranchisement valuation formula will arrive, but no firm date has been set. The Housing Secretary has spoken of a leasehold abolition programme for new-build houses being completed by the end of this Parliament. Given that the current Parliament runs to 2029, that is a wide target window. Campaign groups including the National Leasehold Campaign are pushing for a statutory timetable rather than ministerial assurances, which is a reasonable ask given the history of this reform process.
For existing leaseholders, the most immediate practical change is the service charge transparency framework. If you are in a building where charges feel arbitrary, you now have a stronger basis for requesting documentation and initiating a tribunal challenge. It remains slow and grinding, but the right exists in a more usable form than it did three years ago.
The broader context here is worth noting. As I covered in Britain’s crumbling leasehold system and what the Reform Act actually promises homeowners, the political momentum behind this issue has been building for years, and the Act itself is a genuine step forward from the status quo ante. The problem is that the distance between a step forward and a resolution is still very large. And separately, the financial pressures facing leaseholders compound with everything else hitting household budgets, in the same way that the hidden toll of leasehold ownership on trapped English homeowners documented so starkly: the inability to sell, remortgage or extend a lease without incurring costs that can reach tens of thousands of pounds.
The inheritance dimension
One thing that rarely features in the mainstream coverage is the inheritance angle. A flat on a 75-year lease is not a meaningful asset to pass to the next generation. After the 2025 Budget changes to inheritance tax thresholds, more families are thinking carefully about what their property actually represents in estate terms. A leasehold flat with a depreciating lease is, in some cases, a liability, not a legacy. The inheritance tax changes and what they mean for families add another layer of urgency to getting enfranchisement costs under control.
My reading of where this sits in 2026 is this: the Act was necessary, it has delivered some meaningful protections, and it has failed to deliver the structural shift it was sold as. The valuation formula remains unreformed. New-build houses are still being sold as leasehold. Managing agents still operate in a market that rewards opacity. The reform is real but incomplete, and the gap between what was promised and what has been enacted is wide enough that another generation of buyers could be caught in it before the secondary legislation catches up.
For anyone currently in the process of buying a leasehold property, or considering triggering enfranchisement: get independent legal advice, not just from the managing agent’s recommended solicitor. The rights are better than they were. The system is still broken enough to require knowing exactly what you are doing.