The Leasehold and Freehold Reform Act 2024 (LAFRA) received royal assent at the end of May 2024. It was heralded as a key piece of legislation which aims to provide leasehold homeowners greater rights and protections over their homes. The Act follows on from the Leasehold Reform (Ground Rent) Act 2022, which put an end to ground rents for most new residential leasehold properties in England and Wales. Since 3 March 2025, changes to right to manage also came into force, removing the requirement for leaseholders to cover their freeholder’s legal fees when making a right to manage claim.
Now, changes to ground rent affecting older leasehold properties, have been confirmed by Prime Minister, Keir Starmer via a video on TikTok, where he stated that ground rents will be capped at £250 a year for leaseholders in England and Wales, changing to a peppercorn rent after 40 years.
In the video, released on 27 January 2026, the Prime Minster Said:
“Good news for homeowners, we’re capping ground rents at £250. That means if you are a leaseholder, and your ground rent is more than £250, you’ll be paying less.”
“And I’ve spoken to so many people who say this will make a difference to them of hundreds of pounds.”
“That’s really important because the cost of living is the single most important thing across the country.”
“So this is a promise that we said we’d deliver and I’m really pleased that we’re delivering on that promise.”
The full video can be found on the Prime Minister’s TikTok account: @keirstarmer
In response to the announcement, Steve Reed, Secretary of State for Housing, said:
“If you own a flat, you can be forced to pay ground rent that can become completely unaffordable. We said we’d be on the side of leaseholders – which is why today we are capping ground rent – helping millions of leaseholders by saving them money and giving them control over their home.”
“The leasehold system has tainted the dream of home ownership for so many. We are taking action where others have failed – strengthening home ownership and calling time on leasehold for good.”
This marks a wider plan to reform home ownership by the UK government.
What Other Changes Are Taking Place?
Although The Leasehold Reform (Ground Rent) Act 2022 ended ground rent for most new long residential leases going forward, these updated proposals are focused on tackling unfair and costly ground rents in older leases. The cap will now apply to most residential leases granted before the Act came into force.
Additionally, the government is in consultation to ban the sale of leasehold flats. Under these proposals, developers will no longer be allowed to sell new flats as leasehold (except in limited cases). If approved, these reforms will mean that new flats will be sold as commonhold, meaning that you will jointly own the ground your flat is built on and the overall building with the other property owners.
The reforms have been published in a draft Leasehold and Commonhold Reform Bill. The draft Bill will now move to pre-legislative scrutiny, expected to be carried out by the Housing, Communities and Local Government (HCLG) Select Committee. Subject to parliamentary timings, the ground rent cap could come into force in late 2028.
For more information on these changes, read the announcements here:
- Ministry of Housing, Communities and Local Government: Own a flat or looking to buy? Here’s what the new leasehold shake-up means for you.
- UK Press Release: PM: “We’re capping ground rents at £250”
While these changes are seen as a positive step forward in leasehold property ownership, not everyone agrees. In comments published by BBC News, the Residential Freehold Association criticised the ground rent cap as a “wholly unjustified interference with existing property rights”. It says it will mean many professional freeholders will leave the sector, “hinder[ing] building safety projects and disrupt[ing] the day-to-day lives of residents”.
The group are calling on the government to focus on other aspects of housing reform, “such as regulating managing agents, improving transparency and raising professional standards”.
Source: BBC News: What is ground rent and how are leasehold rules changing?
We have also previously highlighted in our blog, ‘Why is the Leasehold and Freehold Reform Act Being Delayed?’, that in 2025, a group of freeholders unsuccessfully tried to challenge the previous government’s leasehold reforms in the High Court.
What Has Already Been Implemented?
Various benefits of LAFRA are already in force, including:
- Abolition of the Two-Year Rule – The two-year ownership requirement (having owned the lease for two years before applying for extension or freehold) was abolished in January 2025. However, the changes to how lease extension premiums are calculated (e.g., valuation methodology, capping ground rents, removing marriage value) are not yet all in force.
- Right to Manage – Qualifying criteria for the Right to Manage have been changed to make it easier for leaseholders to take over management.
- Building Safety Act Amendments – Some changes to the Building Safety Act 2022 via LAFRA are already live.
What Does This Mean for You?
Leasehold properties bring with them various additional challenges. If you are considering buying a leasehold property, it’s essential to obtain proper legal advice from an experienced, regulated professional. Our leasehold property specialists can review the lease terms, check for any potential issues, and advise on all matters concerning leasehold property ownership and purchases.
If you are thinking of extending a lease now, be careful about when to act. Doing so now could mean you are negotiating under the “old” rules (shorter extension, possibly higher costs), but waiting carries the risk that reforms may be delayed or change.
It is also worth remembering that there may be mortgage or resale considerations, as some lenders or buyers may prefer a longer lease now, so delaying extending a lease may not be suitable if you need to sell your property now.
If you are a leaseholder and need some legal advice on the Leasehold and Freehold Reform Act 2024 or any other matter affecting you, get in touch with us today.
Leasehold and Enfranchisement Solicitors
We have extensive experience helping people in Kingston upon Thames, London, and across the South East of England with issues associated with leasehold properties, including lease extensions and enfranchisement, right to manage, and negotiations with freeholders. Our team also includes members of the Association of Leasehold Enfranchisement Practitioners (ALEP), ensuring you receive specialist expertise in this complex area of law.
Please get in touch with one of our specialist lease extension and freehold acquisition solicitors, to discuss the best way forward for you. We will provide you with further and specific advice tailored to your circumstances.
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