King’s Speech 2026 – further leasehold reform proposals confirmed while leaseholders continue to wait for valuation changes from past reforms
Yesterday’s King’s Speech confirmed that the Government intends to continue with further leasehold and commonhold reform legislation during the current Parliamentary session.
The speech itself contained only a brief reference to leasehold reform, stating:
“My Ministers will bring forward legislation to increase long-term investment in social housing and to reform the leasehold system, including the capping of ground rents.”
However, accompanying Government briefings and subsequent ministerial commentary make clear that the proposed reforms are intended to go significantly further than the measures already contained in the Leasehold and Freehold Reform Act 2024 (LAFRA 2024).
Commonhold and Leasehold Reform Bill
The Government has confirmed that a new Commonhold and Leasehold Reform Bill (CALRB) will be introduced to Parliament. The proposed legislation follows publication earlier this year of the draft Commonhold and Leasehold Reform Bill and the accompanying consultation on moving new flats to commonhold ownership.
The reforms referred to in Government materials accompanying the King’s Speech include:
• making commonhold the default tenure for most new flats;
• banning the grant of new long residential leasehold flats in most circumstances;
• making conversion from leasehold to commonhold easier for existing buildings;
• reforming or replacing aspects of the current forfeiture regime;
• capping existing ground rents; and
• introducing further leaseholder rights and protections.
The Government has also announced a proposed new statutory right for leaseholders to request installation of faster broadband infrastructure where freeholders have previously been able effectively to block or delay upgrades.
Ground rent cap
The King’s Speech expressly referred to the “capping of ground rents”.
At the time of writing, the Government has not yet published the detailed provisions that will implement that proposal. However, various reports following the speech indicate that the Government is considering a cap of £250 per annum for existing residential leases.
That proposal is likely to remain controversial. Any retrospective interference with existing contractual ground rent arrangements may lead to further debate around lender impacts, pension fund investments and potential human rights challenges.
The detail of any exemptions, transitional arrangements and treatment of indexed rents will therefore be important.
The accompanying statement by MHCLG states that the £250 cap is expected in 2028.
Relationship with the Leasehold and Freehold Reform Act 2024
Importantly, many of the major valuation reforms contained in LAFRA 2024 are still not yet in force.
In particular:
• the abolition of marriage value;
• the requirement to disregard certain onerous ground rent terms for valuation purposes; and
• several enfranchisement valuation reforms,
All still await commencement regulations.
Nor have the changes to the ability of landlords to recover their costs been implemented.
The Government has continued to indicate that it intends to implement the remaining provisions of LAFRA 2024 alongside the newer commonhold reforms.
Accordingly, while the King’s Speech confirms continuing political momentum behind leasehold reform, many of the practical changes that leaseholders and landlords are waiting for remain prospective rather than operative.
Leaseholders may feel frustrated that they must await the Government passing the CALRB into law before they can expect to enjoy the benefit of the reforms made prior to the election.
Timing
Timing indicated is:
Implementation of the remaining LAFRA reforms to make it ‘Cheaper and easier to buy your freehold or extend your lease’ – after the CALRB receives Royal Assent.
£250 cap on ground rents – 2028.
The new commonhold model –2029 prior to the end of this parliament
Practical implications
For developers, investors, lenders, freeholders, RTM companies and managing agents, the direction of travel is now increasingly clear:
• commonhold is intended to become the default structure for new flats;
• long-term residential ground rent income streams remain under political pressure;
• further restrictions on traditional leasehold ownership structures are likely; and
• the Government appears committed to continuing the gradual dismantling of the traditional residential leasehold model.
However, substantial uncertainty remains around implementation dates, detailed drafting and the interaction between the proposed legislation and the provisions of LAFRA 2024 that have not yet been brought into force.
The detail of the Bill, when published, will therefore be critical.
Mark Vinall, Partner, Ashley Wilson Solicitors LLP
Links
Government King’s Speech page: https://www.gov.uk/government/speeches/the-kings-speech-2026
Draft Commonhold and Leasehold Reform Bill: https://www.gov.uk/government/publications/draft-commonhold-and-leasehold-reform-bill
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