For decades, purchasing a leasehold property in England and Wales has felt like a compromise, writes Salv Sole, Head of Property at KWW Solicitors in East Molesey.

While it offers a foot on the property ladder – particularly in urban centres where flats dominate the market – the ‘feudal’ nature of the system has often left homeowners feeling more like long-term tenants than true owners.

However, the landscape is shifting. Following the Leasehold and Freehold Reform Act 2024, the UK Government has taken an even bolder step this week with the publication of the draft Commonhold and Leasehold Reform Bill (January 2026). This landmark announcement promises to dismantle the most punitive aspects of leasehold ownership.

If you are currently eyeing a leasehold flat or house, here is what you need to know about the traditional considerations and the game-changing reforms just announced.

The ‘Big Three’ traditional considerations

Before diving into the new laws, the fundamental checks of leasehold conveyancing remain vital:

The unexpired term: A lease is a wasting asset. Historically, once a lease dropped below 80 years, it became difficult to mortgage and expensive to extend due to ‘marriage value’.

Service charges and management: Unlike freeholders, leaseholders pay for the upkeep of communal areas. You must scrutinise the last three years of service charge accounts and look for any major works planned for the building.

The lease terms: From ‘no pets’ clauses to restrictions on subletting, the small print of a lease dictates your lifestyle.

The January 2026 breakthrough: Capping ground rents

The headline news this week is a direct assault on the money-for-nothing culture of ground rents. For years, many leaseholders were trapped by doubling ground rents that saw annual fees spiral into the thousands of pounds, making properties unsellable.

The Government this week announced a universal £250 annual cap on ground rents for existing leases. This is a massive win for those in pre-2022 properties who were not covered by previous protections.

The reform goes further: this £250 cap is a transitional measure. After 40 years, all ground rents will legally reduce to a peppercorn (zero financial value). This effectively aligns older leases with the zero-ground-rent standard already in place for brand new leases.

If you are buying a property with a high ground rent today, this legislation – once passed -will significantly protect your future resale value and monthly outgoings.

Beyond the cap: A shift toward empowerment

The Government’s statement didn’t stop at ground rents. Several other reforms are set to rebalance the scales between leaseholders and freeholders:

The end of forfeiture: Perhaps the most draconian part of the old system was forfeiture, where a freeholder could seize a property and all its equity over a debt as small as £350. The new Bill proposes to abolish forfeiture, replacing it with a fairer, more proportionate debt-recovery regime.

A ‘commonhold’ default: The Government is moving toward making commonhold the default for new flats. Under commonhold, you own your flat forever (no lease expiry) and have a legal say in how the building is run through a residents’ association.

The 990-year extension: Under the 2024 Act (now being fully implemented), the standard lease extension has increased from 90 years to 990 years. Furthermore, the two-year rule, which forced buyers to wait two years before they could legally request an extension, has been scrapped. You can now start the process on day one.

What does this mean for your purchase?

If you are in the middle of a transaction or beginning your search, these reforms should offer significant peace of mind. The leasehold ‘trap’ is being dismantled piece by piece.

However, it is important to remember that while the direction of travel is clear, some of these measures (particularly the £250 cap) are in the draft Bill stage and will take time to become law.

Investors and freeholders may challenge these changes in court, but the Government’s commitment to “ending the feudal system” is stronger than ever.

How KWW can help

Navigating these changing laws requires a specialist property solicitor who is up to speed with the 2026 legislative calendar. That’s us. We ensure your lease is scrutinised not just for what it says today but for how it will benefit from these upcoming reforms.

If you would like us to review a specific leasehold contract and provide a breakdown of how the new ground rent caps will affect your future costs, contact our property team today.