Ground Rent Reform: What's Changing for Leaseholders in 2026

A reform that's easy to misread as "ground rent is banned"

Headlines about leasehold reform often give the impression that ground rent has simply been abolished across the board. The reality is more layered: reform has genuinely changed the position for new leases, while reform for the much larger stock of existing leases — including many with the most problematic escalating clauses — is still being worked through.

What's confirmed for new leases

The Leasehold Reform (Ground Rent) Act 2022 restricts ground rent on most new long residential leases to a peppercorn rate — effectively zero, a nominal legal term rather than a genuine ongoing payment. This applies going forward to new qualifying leases, removing the ability for a new lease to be sold with a meaningful ongoing ground rent obligation, let alone an escalating one.

What's NOT automatically fixed: existing problematic leases

This is the part that catches many existing leaseholders out. If you already hold a lease granted before this reform, with an escalating or "doubling" ground rent clause (where the ground rent contractually doubles every set number of years, sometimes producing eye-watering sums decades into the lease), that clause is not automatically rewritten by the new-lease reform. These existing leases remain a specific, ongoing area of government consultation and attention, given widespread, well-documented cases of such clauses making properties very difficult to sell or remortgage — but check current official guidance for the confirmed state of any broader retrospective reform, since this is a genuinely evolving area rather than settled law.

Why doubling clauses cause practical mortgage problems

Many mainstream mortgage lenders became notably more cautious about leasehold properties with escalating ground rent terms, particularly doubling clauses, because the potential future ground rent liability can become disproportionate to the property's value over the life of the lease — directly affecting a lender's risk assessment. This has, in practice, been one of the most damaging effects of these clauses: not just the cost itself, but the difficulty selling or remortgaging a property once a buyer's solicitor or lender flags the clause.

The end of new leasehold houses

The Leasehold and Freehold Reform Act 2024 includes provisions aimed at effectively ending the sale of new leasehold houses (as distinct from flats, where a form of shared-building ownership structure remains more inherently necessary), subject to limited specific exceptions. Implementation of Act provisions has generally been phased, so check current guidance for the confirmed scope and timing relevant to any specific transaction.

Making lease extension and freehold purchase easier

Alongside the ground rent and new-leasehold-house provisions, the wider reform agenda includes measures intended to simplify and potentially reduce the cost of:

• Extending a lease (statutory lease extension)
• Buying the freehold (enfranchisement), whether individually or collectively with other leaseholders in a building

The detail of valuation methodology changes and their implementation timetable should be checked against current official guidance, since the practical cost impact for any individual leaseholder depends on the specific circumstances of their lease and building.

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Commonhold: the longer-term alternative

Commonhold is a fundamentally different ownership structure where flat owners own their individual unit outright — rather than via a lease from a landlord — and jointly manage the building through a commonhold association. It sidesteps ground rent, lease-length, and many service-charge governance issues entirely, since there's no landlord-tenant relationship in the traditional leasehold sense.

The government has signalled an intention to make commonhold the standard model for new flats going forward, but it currently remains a minority form of ownership in the UK, and the practical detail of any transition (including what happens to the existing vast stock of leasehold flats) is still being worked through.

What existing leaseholders with a problematic clause should do

1. Get your lease reviewed by a solicitor specifically for ground rent escalation clauses, particularly if you're planning to sell or remortgage.
2. Consider a formal lease extension or freehold purchase (enfranchisement) if the ground rent terms are a genuine ongoing problem — this is a statutory right in many circumstances, though it comes with a cost.
3. Check mortgage lender criteria carefully before assuming any lender will accept the property's specific ground rent terms, particularly for a remortgage.
4. Keep an eye on further reform announcements, since existing-lease ground rent reform remains an active area of government policy development rather than a settled, finished process.

Ground rent reform has genuinely improved the position for new leases, but existing leaseholders with problematic terms need to actively manage their own position — through legal advice, lease extension, or enfranchisement — rather than assuming the broader reform agenda has already fixed their specific lease.