Leasehold Reform 2026: What Buyers, Sellers and Flat Owners Need to Know

Leasehold law is changing. If you own, are buying, or selling a leasehold flat, the 2026 reforms could affect your plans.

For many leaseholders, the changes are positive, but every lease is different. Taking advice early can help avoid delays or unexpected costs.

Why leasehold reform matters in 2026

Around five million homes in England and Wales are leasehold, most of them flats.

Many leaseholders have faced high ground rents, rising service charges, and costly lease extensions. The Leasehold and Freehold Reform Act 2024 began addressing these concerns, with further changes expected in 2026.

For buyers and sellers, these leasehold law changes in the UK matter because lease terms can affect mortgage eligibility, property value, and how smoothly a transaction progresses.

What’s changing for leaseholders in 2026?

Some changes are already in place or being introduced.

Leaseholders no longer need to wait two years after purchase before extending their lease or starting the process to buy the freehold. Now, owners can act immediately if lease length is a concern.

The Right to Manage has also been extended to more buildings, including some mixed-use developments, and leaseholders are no longer responsible for paying the freeholder’s legal costs when making a claim.

Further proposals include capping ground rents, greater transparency around service charges and managing agent fees and abolishing forfeiture in favour of a fairer enforcement scheme, as well as longer-term plans to phase out new leasehold flats.

While not all of these measures are yet in force, they indicate the likely direction of future leasehold reform for new and existing properties.

You can read the draft Commonhold and Leasehold Reform Bill here.

What leasehold reform means for buyers and sellers

Lease terms can affect mortgage approval and buyer’s confidence.

Sellers should review their lease early to spot any potential issues.

For buyers, the key points to check include:

• Lease length - most lenders require sufficient years remaining after the mortgage term

• Ground rent - high or escalating rents can affect mortgage eligibility

• Service charges - reviewing past charges can reveal rising costs or planned major works

• Managing agent performance - how the building is managed can affect both costs and future resale value

If you are buying a new build leasehold flat, it is important to review ground rent and service charge provisions carefully before exchange.

Our residential property team can advise on all aspects of buying and selling, including leasehold properties.

Lease extensions and buying the freehold

Lease extensions and collective freehold purchases may become more accessible as reforms progress.

However, waiting for future changes may not always be the best option. If your lease is below 80 years, extending it sooner may be advisable, as costs can increase as the lease shortens.

Leaseholders considering extending their lease or purchasing the freehold should take advice before starting the process.

Common pitfalls include informal extensions, errors in formal notices, or not understanding the full costs involved.

How leasehold reform affects mortgages, remortgages and equity release

Lenders remain cautious with leasehold property, particularly where lease terms or ground rents raise concerns.

A short lease or problematic ground rent clause can affect your ability to secure a mortgage, remortgage, or release equity from your home.

Some reforms may improve mortgage eligibility for certain properties, but lenders will still assess the individual terms of the lease.

Addressing potential lease issues early can help reduce delays when applying for finance or selling.

Why legal advice is still essential for leasehold properties

Leasehold law remains complex. Reforms are introduced gradually, and the terms of each lease can vary from property to property.

Whether you are buying, selling, extending a lease or exploring the possibility of purchasing the freehold, early legal advice can help save time, cost and stress.

For advice on leasehold sales, purchases, extensions or freehold matters, speak to our residential conveyancing team on 024 7663 2121 or email info@bandhattonbutton.com.