Compliance · 8 min read · Updated 25 October 2026

Leasehold Reform in 2026: What Is in Force, What Is Proposed, and Where Software Helps

Commencement status, the proposed £250 ground rent cap, and a dated checklist for leasehold files.

By Appan Pathmanathan, Chief Operating Officer, Lex Sentinel

The Leasehold and Freehold Reform Act 2024 is only partly in force. Removal of the two-year ownership rule is live, and most service charge, insurance and enfranchisement reforms are not. The £250 ground rent cap is not in the Act. It is proposed in a draft Bill. Software can extract lease terms and hold a dated tracker, but a solicitor must confirm each provision's status.

I am Chief Operating Officer of Lex Sentinel, which builds artificial intelligence (AI) tools for conveyancers, so I have an interest in the software question below. This article is general information for firms in England and Wales and is not legal advice. It draws on the sources listed below, which I checked on 25 October 2026, and commencement and the draft Bill are moving, so check legislation.gov.uk and GOV.UK before relying on it. Statements marked "in my view", and the table and steps below, are my own opinion.

Which parts of the Leasehold and Freehold Reform Act 2024 are in force?

Three groups of provisions are in force: the removal of the two-year ownership rule (section 27), the building remediation orders (sections 114 to 116) and the right to manage reforms (sections 49 to 52 and part of section 64). The Act on legislation.gov.uk was up to date with changes known to be in force on or before 25 October 2026, but the contents page does not list commencement. Section 27 came into force on 31 January 2025 under statutory instrument (SI) 2025/57, and HM Land Registry's Practice Guide 27 refers to its commencement on that date. Sections 114 to 116, which cover remediation orders and remediation contribution orders for building defects, came into force on 31 October 2024 under SI 2024/1018. Sections 49 to 52, which deal with right to manage claims, and part of section 64 came into force on 3 March 2025 under SI 2025/131, the Commencement No. 3 Regulations.

GOV.UK's leasehold toolkit for England, published on 20 May 2026, says the right to manage reforms took effect in March 2025 and that long leases over 21 years no longer count as assured tenancies from 27 December 2025.

What is still waiting to be commenced?

Service charge demand forms, annual reporting, enhanced information rights, insurance commission rules, litigation costs changes, enfranchisement reforms and the ban on new leasehold houses are not yet in force, and the GOV.UK toolkit gives no dates. An accountancy firm for landlords, Property Tax Partners, has a page on what is in force, as at 21 August 2026, which lists the same provisions and others, including marriage value abolition and 990-year extensions, as having no commencement regulations. That page is a secondary source. On 27 January 2026 the government said in a written statement that it intends to correct a small number of specific but serious flaws in the 2024 Act through primary legislation that is not part of the draft Bill, and that this will allow it to commence the Act's enfranchisement provisions. Valuation rates will be set in secondary legislation. The statement gives no dates.

Is there a cap on ground rent?

The Leasehold and Freehold Reform Act 2024 contains no ground rent cap that I could find, although section 48 lets a leaseholder vary a long lease to replace rent with a peppercorn. The Leasehold Reform (Ground Rent) Act 2022 made ground rent a peppercorn for most new long residential leases from June 2022, and that is a separate regime. The proposal to cap many existing ground rents at £250 a year is in the draft Commonhold and Leasehold Reform Bill, published on 27 January 2026. The cap would be £250 a year initially, changing to a peppercorn after 40 years. The draft Bill would also ban the use of leasehold for most new flats and replace forfeiture with a new lease enforcement scheme.

The draft Bill is still going through pre-legislative scrutiny. The Housing, Communities and Local Government Committee's report, published on 27 May 2026, supports the £250 figure, wants the cap in force two months after Royal Assent and asks the government to justify the 40-year period. The report records two different timings for the cap taking effect: the Committee's own view of late 2027 and the government's current target of late 2028. The government's response was due by 27 July 2026. On 14 July the Housing Minister told the Committee it could not meet that date, and I found no published response. In early October the Prime Minister committed to introducing the Commonhold and Leasehold Reform Bill before Christmas 2026. I found no introduced Bill as at 25 October 2026, so check the Parliament Bills website before relying on this.

What does this mean for a leasehold purchase?

A leasehold purchase file needs a dated note of which rules applied on the date of advice. In my view, a lease extension or enfranchisement claim no longer depends on two years of ownership. A buyer cannot assume a ground rent cap exists, and a seller's lease may contain escalating ground rent that the draft Bill would, if enacted, cap. A buyer cannot assume the service charge and insurance reforms apply yet. The advice a client gets should state which provisions were in force on the date it was given.

Where can software help, and where can't it?

Software can pull the ground rent, review and term provisions from a lease and compare them with the replies, and a person has to decide what they mean for the client. The table shows my view of the line. I found no statement from the Solicitors Regulation Authority or the Law Society on software and leasehold reform.

Task	What software can do	What a person must do
Reading the lease	Extract the term, ground rent amount and review dates	Check the extraction against the lease and decide how the clause operates
Tracking reform	Hold a dated list of provisions and their commencement	Confirm each provision's current status from the legislation
Cross-checking replies	Flag a ground rent or term that differs from the replies	Decide whether the difference matters and who must be told
Advising	Draft a summary of the lease terms	Advise the client on the law in force at the date of advice

What should a firm do?

A firm should treat reform status as a fact to check and record on each file.

Keep a dated reform tracker showing each provision's commencement status and the source.
Record on each leasehold file the date of advice and the provisions in force at that date.
Do not describe the £250 cap or the draft Bill as law in client advice.
Check the ground rent and review terms in the lease against the replies to enquiries.
If you use software to extract lease terms, record who checked the output.

About the author

Appan Pathmanathan is a solicitor who has worked in UK legal practice since 2001, including litigation involving money laundering and fraud, and conveyancing, and has been managing partner of a law firm. He delivers anti-money laundering and compliance training. Profile: LinkedIn.

Sources

Checked on 25 October 2026.

Frequently Asked Questions

Is there a ground rent cap in force?

There is no ground rent cap in force. A £250 cap on many existing ground rents is proposed in the draft Commonhold and Leasehold Reform Bill, which has not been enacted.

Is the Leasehold and Freehold Reform Act 2024 in force?

The Leasehold and Freehold Reform Act 2024 is not fully in force. Some provisions are, including section 27 on the two-year ownership rule from 31 January 2025, and others await commencement regulations. Check each provision.

Do you still need two years' ownership to extend a lease?

You no longer need two years' ownership to extend a lease, because section 27 of the 2024 Act removed that requirement from 31 January 2025, according to HM Land Registry's Practice Guide 27.

What is the draft Commonhold and Leasehold Reform Bill?

It is a Bill published in draft on 27 January 2026 that proposes capping many ground rents at £250, banning leasehold for most new flats and replacing forfeiture. It is in pre-legislative scrutiny.

Can software tell me what leasehold reform applies to a lease?

It can extract lease terms and hold a tracker, but in my view a person must confirm each provision's commencement and advise on the law in force at the date of advice.