Leasehold Reform: What Flat Owners Should Be Watching

For years, leasehold has been one of the more confusing parts of home ownership. Many people buy a flat thinking of it as “their home”, only to later realise that the legal structure is very different from owning a freehold house. There may be a lease term to watch, ground rent rules to understand, service charges to budget for, and a freeholder or managing agent involved in decisions about the building.

The government is now looking at bigger changes to the way flats are owned in England and Wales. In January 2026, it opened a consultation on moving towards commonhold and banning leasehold for new flats, with the aim of making commonhold the default ownership model for newly built flats in future [1].

With a leasehold flat, you own the right to live in the property for a set number of years. The building and land are usually owned by a freeholder. The lease sets out what you can and cannot do, what charges you may need to pay, and how the building is managed.

This is why lease length matters. A flat with a long lease may be easier to mortgage and sell. A flat with a shorter lease can be more difficult, particularly as the lease drops closer to 80 years. Extending a lease can be important, but it can also be expensive and complicated, so it is something owners should not leave too late.

Commonhold is different. Instead of owning a lease that gradually runs down, flat owners own their individual home outright and collectively manage the shared parts of the building.

In simple terms, commonhold is designed to give flat owners more control. Decisions about maintenance, costs and management are intended to sit with the people who live in and own the homes, rather than a separate landlord.

The government says commonhold gives homeowners full ownership with no time limit and a say in how the building is managed, including shared costs and responsibilities [2].

Not overnight. This is one of the most important points for current flat owners. The proposed ban is focused on new leasehold flats, not automatically converting every existing flat in the country.

If you already own a leasehold flat, you should not assume your property will suddenly become commonhold. However, the wider reform agenda could still affect you over time, particularly around service charge transparency, lease extensions, ground rent and the ability for leaseholders to take more control of their building.

The government has also said it wants to make it easier for existing leaseholders to convert their buildings to commonhold voluntarily, including reducing the consent threshold from 100% to 50% [3].

For existing leaseholders, the key areas to keep an eye on are:

• Lease length — If your lease is getting shorter, it may affect the value and saleability of your flat. It may also affect mortgage options for future buyers.
• Ground rent — Some older leases include ground rent terms that can increase over time. These can cause problems when selling or remortgaging, especially if lenders view the terms as onerous.
• Service charges — These are often one of the biggest frustrations for flat owners. It is worth checking what you are paying for, whether major works are expected, and how clearly charges are explained.
• Building management — If you are unhappy with how your block is managed, it may be worth exploring rights such as Right to Manage or collective action with other leaseholders.

Anyone buying a flat should ask more questions than they might with a house.

How many years are left on the lease? What is the annual ground rent? Can it increase? What are the service charges? Are major works planned? Is there a reserve fund? Who manages the building? Are there any disputes between leaseholders and the freeholder or managing agent?

These questions may not be exciting, but they can make a big difference to the true cost of owning the flat.

Leasehold issues can affect mortgage applications. Lenders may be cautious about short leases, escalating ground rents, unclear building safety costs or high service charges. A property can look affordable at first glance, but if the service charge is high or likely to rise, that can change the overall monthly budget.

This is especially relevant for first-time buyers, who often buy flats as their first step onto the property ladder.

Leasehold reform is moving, but it is not something flat owners should panic about. For now, the practical steps are simple: understand your lease, check your costs, keep an eye on reform, and get advice before buying, selling, extending a lease or challenging charges.

For flat owners and buyers, the main message is this: leasehold is not just legal small print. It can affect what you pay, how much control you have, how easy the property is to sell and what mortgage options may be available.