Leasehold Reform in Mid-2026: Cutting Through the Confusion
If you own a leasehold property, you have likely seen years of headlines promising massive financial savings, 990-year lease extensions, and the total abolition of the “marriage value.”
The media may make you believe that these changes are already law. They are not.
The reality on the ground is a fractured legal landscape. The Leasehold and Freehold Reform Act 2024 was passed in the final days of the previous government, but its most impactful financial measures require secondary legislation to take effect. Meanwhile, the current government has introduced a completely new piece of legislation, the draft Commonhold and Leasehold Reform Bill 2026, which has further complicated the timeline.
For leaseholders trying to decide whether to extend their lease or buy their freehold right now, this uncertainty can be paralysing. This article sets out the exact legal reality of what is in force today, what is blocked by the courts, and what the true timeline looks like.
What is actually in force today?
As of mid-2026, only the administrative barriers of the 2024 Act have been brought into law. If you are a leaseholder, you can currently benefit from the following two major changes:
The Two-Year Rule is dead. As of 31 January 2025, buyers no longer have to wait two years after purchasing a property to serve a statutory notice to extend their lease or buy their freehold. You can do this on day one of ownership.
Right to Manage is more accessible. As of 3 March 2025, buildings with up to 50% non-residential (commercial) floor space can now legally qualify for Right to Manage (RTM), up from the old 25% limit. Furthermore, leaseholders are no longer liable to pay the freeholder’s non-litigation legal costs when bringing a standard RTM claim.
Note: The 50% commercial limit only applies to Right to Manage. If you want to collectively buy your freehold, the old 25% commercial limit is still strictly in force.
The Blockage: Why aren't the financial reforms law yet?
The most anticipated elements of the 2024 Act are the financial reforms: the right to a 990-year lease extension, the capping of ground rents at 0.1% of freehold value for enfranchisement calculations, and the total abolition of marriage value (which makes extending leases under 80 years prohibitively expensive).
None of these are in force. They are currently stalled by two roadblocks:
- The Freeholders' Legal Challenge
Freeholder groups launched a judicial review against the government, arguing that abolishing marriage value and capping ground rents violated their human rights by unlawfully depriving them of their possessions.
While the High Court firmly dismissed this challenge in October 2025, the Court of Appeal granted the freeholders permission to appeal in April 2026. We are now waiting for that Court of Appeal hearing, which is expected in late 2026 or early 2027. - The Valuation Rates Consultation
The government cannot "switch on" the 990-year extensions or abolish marriage value until they set the specific mathematical rates (capitalisation and deferment rates) that valuers must use. The government only just launched the formal consultation to decide these rates in July 2026. Setting these rates into binding regulations will take time.
Tangled up with the 2026 Draft Bill
To complicate matters further, the government introduced the draft Commonhold and Leasehold Reform Bill in January 2026.
This new Bill aims to deliver on wider political promises. Its headline proposals include banning the sale of new leasehold flats to make commonhold the default, and capping all existing ground rents at £250 a year (reducing to a peppercorn after 40 years).
Because the government plans to use this new 2026 Bill to fix certain flaws in the 2024 Act, the rollout of the remaining 2024 financial reforms is now politically tangled up with the progress of this new legislation.
The Bottom Line: Should you wait?
Due to the ongoing Court of Appeal litigation, the freshly launched valuation consultation, and the sheer scale of the new 2026 Bill, the new valuation rules and 990-year extensions will not come into effect until at least 2027 (and likely later for the £250 ground rent caps).
If your lease has plenty of time left (e.g., 90+ years) and you are not planning to sell, you have the luxury of waiting to see how the court cases and consultations play out.
However, if your lease is hovering near the critical 80-year mark, waiting is a highly dangerous strategy. If your lease drops below 80 years while you wait for these delayed reforms, the immediate financial penalty of marriage value (which is still legally payable today) will likely outweigh any future savings.
Do not rely on headlines. Base your property decisions on the law as it operates today, and seek expert legal and valuation advice before taking action.
How can we help?
Maria Guida is a highly experienced Associate Partner in the Laurus Property team. She has extensive experience across residential and commercial property law. She specialises in leasehold enfranchisement, freehold and leasehold transactions, high-value and complex mixed-use developments, commercial leases for landlords and tenants, and the acquisition and disposal of offices, warehouses, hospitality and industrial premises.
If you would like advice on extending your lease, buying your freehold or how the reforms may affect you, call us on 020 3146 6300 or email Maria directly at maria.guida@lauruslaw.co.uk
