Leasehold reform: slow progress and what it means for sellers

One of the key pledges in Labour's 2024 Election Manifesto was to overhaul the leasehold system, with an end goal of eradicating what was called "a feudal system". Work has since gone on to produce a suitable Bill of Parliament for MPs to discuss, debate and vote upon.

However, Propertymark, the body for property professionals, has indicated that the speed at which everything is being done is too slow. Much of what was promised, it warns, is in danger of being watered down.

The introduction of the Leasehold and Freehold Reform Act 2024 has brought some improvement, but of the original 125 sections that make up the Act, only 10 have been brought into force.

As a consequence, Propertymark notes, leaseholders are still subject to the core problems that reform was intended to overcome: significant financial pressures, rising and often unjustified service charges, and ongoing building safety concerns.

The Draft Commonhold and Leasehold Reform Bill was published separately in January 2026, followed by consultations with key stakeholders. However, none of this additional legislation has yet been implemented.

Of particular concern for leaseholders — and for Propertymark as their advocate — is what has happened with ground rent and service charges.

Ground rent was originally intended to be reduced to a peppercorn rate before disappearing altogether. The current proposal caps ground rent at £250 per year, reducing to a peppercorn only after 40 years — double the timeframe promised by the previous government.

Service charges were intended to be regulated to ensure they were fair. In practice, many have increased with no reasonable justification, and leaseholders often receive little explanation for the rise.

The main problem for current leaseholders is the position they are in when it comes to selling. With ground rent and service charges still under the control of landlords, leasehold properties are becoming increasingly difficult to shift.

The BBC has highlighted the problem in some detail, pointing to leasehold properties with asking prices at less than half of what the original buyer paid. Without meaningful reform — as had been expected from the Manifesto and the subsequent legislation — many buyers are being put off by the ongoing costs associated with leasehold ownership. Reduced demand pushes prices down further, making the prospect of purchasing a leasehold flat even less attractive.

Until further progress is made on these key issues, leaseholders will continue to be frustrated by the diminished value of their property, while prospective buyers remain wary of the charges that could follow a purchase.

Whether you are buying or selling a leasehold or freehold property, having a focused and experienced legal representative on your side makes a significant difference. Our conveyancers at Homeward Legal will start work on your transaction as soon as you agree to your quotation and appoint them to act for you.

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