The Commonhold and Leasehold Reform Bill: Landlord Investment Impact, Live Pipeline Status and What Is Already in Force

The Commonhold and Leasehold Reform Bill is the next reform wave the UK Government has committed to introducing during this Parliament, following the Commonhold White Paper of 3 March 2025. As of 28 May 2026, the Bill has not yet been introduced to Parliament. The previous wave (Leasehold and Freehold Reform Act 2024) is in phased commencement. Ground rents on new long residential leases have been banned since 30 June 2022 under the Leasehold Reform (Ground Rent) Act 2022. Building Safety Act 2022 Sch 8 leaseholder protections have been in force since 28 June 2022.

If you hold freeholds of leasehold blocks, long-leasehold flats or a mixed-tenure BTL portfolio, the money question is plain: what is already in force, what is genuinely coming, and how each reform component hits your income streams and capital value. This is the live picture, written for you as the investor rather than for the leaseholder on the other side of the transaction. Status was checked at gov.uk and parliament.uk on 28 May 2026; re-check before you rely on the position on any later date.

What is in force, what is coming, and what it costs you

Four layers govern your exposure here, and it pays to keep them separate:

1. In force. What is operating today under existing statute: LFRA 2024 phased commencement, the LRGRA 2022 new-lease ground rent ban, BSA 2022 leaseholder protections, the CLRA 2002 Part 1 commonhold framework (existing but largely unused) and CLRA 2002 Part 2 leasehold reform as amended by LFRA 2024.
2. In the pipeline. What the Commonhold White Paper of March 2025 proposes and the forthcoming Bill is expected to carry: default-commonhold for new flats, service-charge transparency reforms, forfeiture reform, ground-rent reform for existing leases, a commonhold conversion pathway and right-to-manage simplification.
3. Investment consequences. The numbers for freehold-of-leasehold-block investors, long-leasehold-flat holders, mixed-tenure BTL portfolios and managing-agent businesses.
4. Live status. A Bill tracker you can re-check before you act.

One discipline runs through all of it. Each reform component sits at a current status, and the gap between them is where investment mistakes happen: announced (in a King's Speech or ministerial statement), proposed in the WHITE PAPER, drafted in the BILL (if it has been introduced by the date you read this), ENACTED (Royal Assent received), or IN FORCE (commencement order made and the date passed). Treat a White Paper proposal as settled law and you can mis-price a freehold by tens of thousands.

What is already in force, before the Bill

Five layers of statute already bite, quite apart from the forthcoming Bill. If you treat the Bill as the whole story, you miss the half of the picture that is already determinative.

LFRA 2024 Part 2 (in phased commencement 2024 to 2027)

The Leasehold and Freehold Reform Act 2024 received Royal Assent in May 2024. Commencement is phased, so not all Part 2 provisions are in force as of 28 May 2026. Check the current commencement state at the gov.uk commencement-orders register before you rely on a specific provision.

The four headline LFRA 2024 changes:

• Abolition of the 2-year qualifying-ownership prerequisite. Leaseholders no longer need to have held the lease for 2 years before claiming statutory lease extension or collective enfranchisement.
• 990-year peppercorn extension term for flats. The LRHUDA 1993 Chapter II individual extension is amended to grant a 990-year extension at a peppercorn rent (replacing the previous existing-lease-plus-90-years framework).
• Abolition of marriage value at the 80-year unexpired-term boundary. The marriage-value uplift in the premium calculation for sub-80-year-unexpired-term leases is removed; extension premiums for short leases reduce materially.
• Deferment and capitalisation rate regulation. The post-Sportelli 5% deferment rate is replaced by a regulated rate; valuation methodology shifts.

Commencement is the live question. Some provisions are in force from defined commencement dates; others still await commencement orders, and until then the old rules apply. A claim notification served before the relevant commencement date is governed by the old rules; one served after is governed by the new rules. That timing turns on a single date, so if you have a claim window open during the transition it is worth getting right.

Leasehold Reform (Ground Rent) Act 2022

LRGRA 2022 is in force from 30 June 2022 (residential long leases) and from 1 April 2023 (retirement homes). It bans monetary ground rent on most new long residential leases (more than 21 years); the permitted ground rent is a peppercorn. The penalty for breach runs from £500 to £30,000 per breach.

The Act does NOT apply to leases granted before 30 June 2022, so contractual ground rent on pre-2022 leases continues. If you hold the freehold of a pre-2022 leasehold block you still receive that contractual ground rent income, and the forthcoming Bill is expected to extend reform to those existing leases.

Building Safety Act 2022 Sch 8 leaseholder protections

BSA 2022 ss.116 to 125 plus Sch 8 are in force from 28 June 2022. Three categories of protection sit on Sch 8:

• Cladding remediation absolute protection (Sch 8 para 8). Qualifying leases receive absolute protection from cladding remediation costs.
• Non-cladding low-value carve-out (Sch 8 para 4). Properties valued at £175,000 or less (£325,000 or less in Greater London) on 14 February 2022 are fully exempt from non-cladding remediation costs.
• Non-cladding graduated cap (Sch 8 para 6). Properties above the low-value threshold face a graduated cap on non-cladding remediation costs (£10,000 to £15,000 base, scaling to £50,000 to £100,000 for high-value properties). Check the current cap figures at legislation.gov.uk before you rely on a specific number.

LFRA 2024 amended Sch 8, with commencement via SI 2024/1018 effective 31 October 2024. The substantive leaseholder protections from cladding remediation continue.

CLRA 2002 Part 1 commonhold framework (existing but largely unused)

The Commonhold and Leasehold Reform Act 2002 Part 1 (ss.1 to 70) created commonhold as an alternative tenure to leasehold, and the framework has existed since 2004. Fewer than 20 commonhold schemes exist in England and Wales, the result of operational design flaws that the Law Commission 2020 report (Law Com 394) addressed. Converting an existing leasehold block needs 100% unit-holder consent plus freeholder co-operation (or court succession at the 80% threshold). The forthcoming Bill is the operational reset meant to make commonhold workable as the default tenure.

CLRA 2002 Part 2 leasehold reform (substantially amended by LFRA 2024)

CLRA 2002 Part 2 covers the right to manage (ss.71 to 113), amendments to collective enfranchisement (ss.114 to 128), new leases for flats (ss.129 to 136), leasehold houses (ss.137 to 149), service charges, managers, ground rent and forfeiture (ss.150 to 171), tribunals (ss.173 to 176C) and general provisions (ss.177 to 179). LFRA 2024 omitted ss.121 to 124, 126 to 128, 130, 132, 134 to 136, 152 to 154 and 160(4)(d); amended ss.167, 172 and 178; and inserted Schedule 11 paras 4A to 4B, 5B to 5C. Check the current consolidated text at legislation.gov.uk before you rely on a specific section number.

What is in the pipeline: the Commonhold White Paper of March 2025

The Commonhold White Paper was published on 3 March 2025 (Welsh translation 19 March 2025). It sets out how a reformed commonhold model would operate, gives the Government's position on the Law Commission's recommendations, and states the objective of making commonhold the default tenure in England and Wales. A White Paper is a policy statement, not legislation. The Bill text, Royal Assent and commencement orders are all still to come, and any of these proposals can change before they reach the statute book.

Six reform components are signalled in the White Paper and expected in the forthcoming Bill:

1. Default-commonhold for new flats. Ban on new long leases for flats; new-build flats to be sold as commonhold units.
2. Service-charge transparency reforms. Standardised statement format; tightened consultation thresholds; leaseholder access to documents; restriction of buildings-insurance commissions paid to managing agents.
3. Forfeiture reform. Substantial reform or abolition of the forfeiture remedy for residential leasehold breaches. Law Commission 2006 and 2020 reports both recommended this; the precise mechanism is not yet determined.
4. Ground-rent reform for existing leases. Consultation outcome pending. Options include a cap (such as £250 per year), a buyout mechanism or phased reduction.
5. Commonhold conversion pathway. A workable mechanism for existing leasehold blocks to convert to commonhold tenure (the operational reset on the CLRA 2002 Part 1 framework that has not delivered conversions at scale).
6. Right-to-manage simplification. Lower RTM qualifying thresholds plus simpler claim procedures.

Every one of these six sits at the WHITE PAPER stage and nowhere further. Do not let the planning collapse the distinction between proposed (in the White Paper), drafted (in a Bill that has not yet been introduced), enacted (Royal Assent received) and in force (commencement order made). The Bill could change any component substantially during its parliamentary passage; the White Paper is not the final shape of any reform.

If you hold the freehold of a leasehold block

If you hold the freehold of a leasehold block (the classic case being a 10 to 20-unit residential block of long-leasehold flats), four things drive your income and capital value:

• Ground rent income. Recurring annual income on pre-LRGRA-2022 leases; nil on post-LRGRA-2022 leases.
• Buildings insurance commission. A material side-income stream, typically 10% to 15% of premium, paid to the freeholder or affiliated managing agent.
• Lease-extension premium income. Occasional lump sums as individual leaseholders extend; marriage-value-driven for sub-80-year-unexpired-term claims (under the pre-LFRA-2024 regime).
• Capital value of the freehold. A multiple of the recurring income streams plus a residual reversionary value.

Worked example. Patel Holdings Ltd owns the freehold of a 12-flat purpose-built block acquired 2018 for £400,000. The block generates: ground rent income £6,000 per year (12 flats × £500 per year on pre-LRGRA-2022 leases); buildings insurance commission £2,400 per year (15% on £16,000 premium); occasional lease-extension premium income (one extension per 2 years at £25,000 plus). What changes under the forthcoming Bill:

• Ground rent £6,000 per year at risk under the existing-lease ground-rent reform. Options under consultation include cap (such as £250 per year) or buyout mechanism. Worst-case scenario: ground rent stream extinguishes; capital value of the freehold reduces by 10 to 15 times annual ground rent (£60,000 to £90,000).
• Buildings insurance commission £2,400 per year at risk under the commission restriction signalled in the White Paper. Worst-case scenario: commission stream extinguishes; capital value reduces by 5 to 10 times (£12,000 to £24,000).
• Lease-extension premium income. Marriage value already abolished under LFRA 2024 (subject to commencement timing); extension premiums for sub-80-year-unexpired-term leases reduce by 40% to 60%. The 990-year peppercorn extension means the lessee acquires longer protection but the freeholder's premium income window per claim is materially reduced.
• Forfeiture remedy. Reform signalled in the White Paper. If abolished, the ultimate enforcement remedy for service-charge or ground-rent arrears is removed; freehold-investment-value risk premium increases.
• Commonhold conversion route. Under the forthcoming Bill, leaseholders gain a conversion pathway. If the 12 leaseholders in this block converge on conversion, Patel Holdings Ltd ceases to hold the freehold (potentially a TCGA 1992 s.22 part-disposal or full-disposal event), ground-rent income and commission stream extinguish.

The decision for Patel Holdings Ltd comes down to timing: dispose of the freehold now and crystallise pre-reform capital value, or hold on the view that the market has already priced in much of the expected reform. That call is yours to make with your advisers; what matters first is having every one of these scenarios on the spreadsheet.

If you hold a long-leasehold flat

If you hold a long-leasehold flat (the classic case being a 60 to 90-year-unexpired-term flat you bought several years ago), the consequences run through the extension question, the SDLT interaction and the conversion alternative.

Worked example. Ms Singh owns a leasehold flat with 65 years unexpired (acquired 2018; original lease 99 years from 1992). Pre-LFRA-2024 lease-extension premium quoted by freeholder (with marriage value): £45,000. Post-LFRA-2024 marriage-value abolition plus 990-year peppercorn extension: estimated premium £18,000 to £22,000.

• Premium-reduction benefit. Approximately £25,000 saving on the extension premium compared to pre-LFRA-2024.
• Extension-term benefit. The 990-year peppercorn-rent extension replaces the existing-lease-plus-90-year framework. Ms Singh's effective ownership horizon extends to 990 years from extension date.
• Timing of the claim. If the claim notification is served BEFORE the relevant LFRA 2024 Part 2 commencement date, the OLD valuation rules apply (marriage value included). Serve it AFTER and the NEW rules apply. Check the commencement state at gov.uk on the date the claim is served.
• SDLT interaction. The SDLT 5% Higher Rates for Additional Dwellings (HRAD) surcharge applies to extension premiums of £40,000 or more where the lessee already owns another dwelling (here, Ms Singh's freehold-investor spouse owns additional property, triggering the HRAD interaction at the £40,000-plus threshold). The forthcoming Bill is not expected to change SDLT treatment; check at gov.uk on the date you need it.
• Commonhold conversion alternative. If the block reaches co-leaseholder agreement on commonhold conversion under the forthcoming Bill's pathway, Ms Singh could convert to commonhold unit-holder status instead of extending the lease. The tax treatment of conversion is unresolved, and although the natural policy direction is a conversion-relief, do not assume it exists until it is enacted.

If you hold a mixed-tenure BTL portfolio

If your BTL portfolio mixes freehold houses, long-leasehold flats and the freehold of a small conversion block, the consequences land differently on each holding type.

Worked example. Mr Singh holds 6 BTL properties: 3 freehold houses, 2 long-leasehold flats (50 and 70 years unexpired), 1 freehold of a 4-flat conversion block.

• 3 freehold houses. Unaffected by LFRA 2024 plus the forthcoming Bill. The commonhold and leasehold reform regime targets multi-occupancy block tenure; single-house freehold is parallel.
• 2 long-leasehold flats (50-year and 70-year). Lease-extension premium trajectory favourable post-LFRA-2024 (marriage value abolished; 990-year peppercorn extension term). The 50-year flat is the priority for extension under the reformed regime; without extension, mortgageability and saleability decline as the lease shortens further.
• 1 freehold of a 4-flat conversion block. Affected by all the freehold-of-leasehold-block risks (ground-rent reform, commission ban, forfeiture reform, commonhold conversion route). Smaller scale than a 12-flat block but proportionate risk.

The SPV question. If you hold the freehold of a leasehold block through an SPV (here, Singh Holdings Ltd), the share-disposal versus asset-disposal trade-off matters. An individual disposal of the freehold property attracts CGT residential rates (18% or 24% depending on the rate band, after the 30 October 2024 FA 2024 reform). A corporate disposal is at the CT main rate of 25% with indexation allowance restrictions. The share-disposal route may attract different treatment but loses any §28-style trading-versus-investment relief that might have applied had the entity been structured as a developer-holding company. Check the current rates and reliefs at gov.uk and the HMRC manuals before you rely on a specific figure.

If your freehold holding includes a managing-agent business

The managing-agent business is the silent co-stakeholder in many freehold-of-leasehold-block holdings. If your freehold holding includes an affiliated managing-agent revenue stream, that business value is at risk in parallel with the freehold-investment value, and it is easy to overlook.

Worked example. BlockMan Property Services Ltd manages 25 leasehold blocks (total approximately 400 leaseholder units) under standard service-charge management contracts. Annual revenue: approximately £250,000 (management fees) plus approximately £60,000 (buildings-insurance commissions at 15% on aggregate £400,000 premium portfolio).

• Buildings-insurance commission stream £60,000 per year. At substantial risk under the commission restriction signalled in the White Paper. Worst-case scenario: commission stream extinguishes; revenue base reduces by approximately 20%.
• Service-charge transparency reforms. Tightened reporting plus leaseholder access requirements increase operational cost (standardised statement format, consultation reforms, leaseholder document inspection). Net effect: lower margin on existing management contracts.
• RTM simplification. Lower thresholds plus simpler procedures accelerate leaseholder takeover of management. Worst-case scenario: 20% of BlockMan's 25 blocks shift to RTM-company management over 3 to 5 years; revenue base reduces by approximately £50,000.
• Commonhold conversion pathway. Blocks converting to commonhold cease to use service-charge management; commonhold-association directors replace the managing-agent function. Worst-case scenario: 10% of BlockMan's 25 blocks convert over 5 to 10 years; revenue base reduces by approximately £25,000.
• Forfeiture reform. Reduces BlockMan's enforcement-action revenue (arrears recovery via forfeiture threat); operational impact limited.
• Cumulative scenario. Combined revenue impact 25% to 35% reduction over 5 to 10 years if all reform components land as signalled. BlockMan must price reform-risk into business-value calculations and consider service-mix diversification (expanding to commonhold-association support services as a new revenue stream).

What commonhold conversion does to your tax position

The tax treatment of commonhold conversion is unresolved as of 28 May 2026. FA 2003 contains no specific commonhold-conversion provision. The forthcoming Bill is expected to clarify it, and the natural policy direction is a conversion-relief to avoid penalising the very route the Government wants to promote. Four tax axes need to be on your list:

• SDLT. Conversion may or may not trigger an SDLT charge depending on consideration structure and statutory relief. The White Paper has signalled the question but the relief is not yet enacted. Do not assume tax-neutral treatment until the relief is in statute.
• CGT. Conversion involves the freeholder ceasing to hold the freehold (potentially a part-disposal or full-disposal under TCGA 1992). Existing leaseholders converting to commonhold unit-holders may have a deemed disposal at the conversion point. The chargeable-gain mechanic depends on the consideration structure plus any specific relief.
• IHT. Commonhold unit-holders have a different ownership interest from long-leasehold tenants, with IHT consequences for individual unit-holders and for estates including unit-holdings.
• Income tax and corporation tax. Ground-rent income stream extinguishes on conversion; service-charge income stream may continue but via commonhold-assessment mechanism rather than service-charge mechanism. The CT or IT treatment depends on the entity holding the freehold and the consideration structure of the conversion.

None of this predicts the final tax treatment. Treat the four axes as a checklist and run your planning alongside the legislative pipeline rather than ahead of it.

Live status: where the Bill actually is

The live status of the forthcoming Bill, as checked on 28 May 2026:

Stage	Status as of 28 May 2026	Verification source
Announced	Yes (King's Speech 2024; verify at hansard.parliament.uk)	Parliament Hansard
White Paper	Yes; Commonhold White Paper published 3 March 2025 (Welsh translation 19 March 2025)	gov.uk Commonhold White Paper
Bill introduced to Parliament	Not yet as of 28 May 2026; verify at bills.parliament.uk on the date you need it	UK Parliament Bills register
First Reading	Not yet	Bills register
Second Reading	Not yet	Bills register
Committee stage	Not yet	Bills register
Report stage	Not yet	Bills register
Third Reading	Not yet	Bills register
Royal Assent	Not yet; no committed date	Royal Assent register
Commencement orders	Not yet; expected phased commencement following Royal Assent	gov.uk commencement-orders register

This status moves quickly. Before you act on any of it, re-check the Bill status at parliament.uk on the date of your decision; the position above is the position as at 28 May 2026.

What this is not

This is not investment advice. The analysis describes the scenarios you should have on your spreadsheet, not a steer on whether to buy, hold or dispose.

It is not legal advice either. The statutory citations and impact analysis are no substitute for solicitor advice on a specific transaction.

And it is not a leaseholder-rights primer. For deep guidance on extension or enfranchisement procedure, consult the Leasehold Advisory Service (LEASE) at lease-advice.org or a specialist solicitor.

What it is: the live pipeline status and investment-impact analysis you need as an investor to see what is coming, what is in force and what to factor into your decisions.

Where to read next

For the Building Safety Act 2022 Sch 8 leaseholder protections in depth (cladding remediation absolute protection, the non-cladding low-value carve-out, the non-cladding graduated cap), see our building safety guide. For SDLT on lease extension (the £40,000 HRAD threshold and the fresh-purchase comparison), see our SDLT leasehold extension guide. For the FTT case-law on SDLT residential-rate determination for leasehold property with a garden easement, see our SDLT case-law guide. For commercial service-charge accounting (the RICS 2018 Statement, the LTA 1985 non-application to commercial, VAT following Sch 10), see our commercial service-charge guide. For the LRA 1967 and LRHUDA 1993 architecture that this Bill modifies, see our lease-extension guide.