Commonhold and Leasehold Reform Bill 2026

The Bill that has been anticipated for some time is finally here. It has various provisions that would lead to profound change in the residential property sector:

1. Banning (most) new leasehold flats.
2. Creating a smoother pathway to conversion to commonhold.
3. Capping all ground rents at £250 and after 40 years dropping ground rents to a nominal peppercorn. Ground rents were prohibited in new leases in 2022, however they continue in existing leases, some escalating significantly, up to thousands of pounds payable annually, over the lease term.  

Questions remain including any compensation scheme for freeholders, on what legal basis new flats would be sold, and how the government intends to provide comfort to mortgage lenders in particular, who did not warm to the commonhold structure when it was first introduced in 2002.