Residential property reform: the current position
Residential property law is undergoing its most significant reform for decades. Anna Favre of Cripps examines the progress of legislation to date, including the Renters’ Rights Act, the Leasehold and Freehold Reform Act and the draft Commonhold and Leasehold Reform Bill, together with the likely implementation timelines.
Residential property law in England and Wales is undergoing its most significant period of reform for decades. Since 2017, successive governments have focused heavily on reshaping the landlord and tenant relationship driven by a view that parts of the existing system are outdated, overly complex and, in some areas, unfairly weighted against residential occupiers.
That policy direction has been influenced heavily by the Law Commission’s wide-ranging 2020 reports on enfranchisement, commonhold and the right to manage. Those reports described the existing leasehold framework as complex, inconsistent, and costly. They proposed substantial reform, designed to simplify leasehold ownership and management rights and make the leasehold system fairer and more accessible. The Law Commission also sought to reinvigorate commonhold as a realistic alternative to leasehold ownership for flats.
The result has been a sustained programme of reform touching almost every aspect of residential property ownership and occupation. The Renters’ Rights Act 2025 (RRA) has fundamentally reshaped the private rented sector. The Leasehold and Freehold Reform Act 2024 (LAFRA) introduced substantial enfranchisement and service charge reforms, although many key provisions are still awaiting implementation. Most recently, the draft Commonhold and Leasehold Reform Bill 2026 (Bill) proposes a further long-term restructuring of residential ownership, including measures intended ultimately to phase out traditional leasehold flats in favour of commonhold. The strategic intention and direction of travel is now reasonably clear. The more difficult question is one of timing and this uncertainty inevitably impacts market confidence and investment decisions.
For those hoping for immediate change, the government has made clear that leasehold reform will be delivered in stages rather than through a single piece of legislation.
In his speech of 29 April 2026, Matthew Pennycook confirmed that implementation of the Leasehold and Freehold Reform Act 2024 is continuing, with further provisions to be brought into force progressively, while a separate draft Commonhold and Leasehold Reform Bill is undergoing scrutiny before being introduced to Parliament.
The government remains committed to making commonhold the default tenure for new flats, strengthening leaseholder rights and reducing reliance on leasehold ownership, but many of the most significant reforms will require further primary legislation and are therefore unlikely to take effect in the immediate future.
“The direction of travel is clear, but the transition to a new commonhold-based system will be gradual and is expected to unfold over several years rather than months”
The next phase of residential property reform
Renters’ Rights Act 2025: what does it mean for landlords?
The Renters’ Reform Act (RRA) represents the most significant reform of the private rented sector in a generation. Its central reform is the abolition of section 21 ‘no fault’ evictions. Landlords will instead need to rely on statutory grounds for possession, including grounds linked to rent arrears, anti-social behaviour, owner occupation or intended sale.
With effect from 1 May 2026, all existing assured shorthold and new tenancies are converted to assured periodic tenancies with greater security of tenure for the tenant.
The RRA also places restrictions on rent in advance, tighter controls on rent increases and new obligations concerning discrimination against tenants with children or those in receipt of benefits.
Enforcement powers available to local authorities have also been strengthened.
For landlords, the practical impact is not that possession becomes impossible; rather, tenancy management becomes more important. Record-keeping, compliance and evidential preparation are likely to become increasingly significant in contested possession proceedings.
Leasehold and Freehold Reform Act 2024: where are we now?
The Leasehold and Freehold Reform Act (LAFRA) received royal assent on 24 May 2024 and contains some of the most substantial leasehold reforms seen in recent years. drawing heavily from the Law Commission’s 2020 recommendations.
Among other things, LAFRA proposes:
new 990-year lease extensions for houses and flats;
the removal of marriage value from enfranchisement calculations;
changes to the right to manage qualification criteria;
reforms to service charge transparency and administration charges;
restrictions on landlords recovering certain litigation costs; and
increased rights for leaseholders in mixed-use buildings.
However, large parts of LAFRA are not yet in force and some aspects, identified by the government as being defective, will require further primary legislation before they are implemented.
LAFRA is also the subject of ongoing legal challenges (primarily on the valuation methodology) from aggrieved landlords and investors set to make significant financial losses. This raises the question of whether legislation is compatible with Article 1 of the First Protocol to the European Convention on Human Rights, which guarantees every person the right to peaceful enjoyment of their possessions. The timing for full implementation of LAFRA therefore, remains uncertain.
Commonhold and Leasehold Reform Bill 2026: what are its implications for landlords?
The draft bill was published on 27 January of this year and takes reform significantly further. It reflects the government’s stated ambition to move away from leasehold ownership for flats over the longer term and to establish commonhold as the default tenure.
The draft bill proposes:
reform of the commonhold framework to encourage wider adoption;
a ban on leasehold for most newly built flats;
abolition of forfeiture and replacement with a new enforcement regime; and
substantial intervention in existing arrangements.
The proposed ground rent reforms are particularly significant. The draft bill proposes a £250 annual cap on most existing residential ground rents, reducing to a peppercorn over a 40-year period. If implemented, the proposal would have a substantial effect on freehold valuation, investment structures and lending considerations across the residential sector.
Some reports estimate £10-£12bn of value will be lost from landlords’ assets, raising the spectre of further legal challenges on similar grounds to those identified in the context of LAFRA Importantly, however, the draft bill remains at the pre-legislative scrutiny stage. The detail may yet change materially before formal legislation is introduced.
What is the likely timeline for leasehold reform?
The Government has repeatedly acknowledged the complexity of reforming a system as deeply embedded as leasehold ownership. Housing Minister Matthew Pennycook has emphasised the need to prioritise legislation that is workable and properly considered, rather than proceeding at speed and risking unintended consequences.
That caution is understandable. Leasehold is not simply a form of home ownership. It underpins lending arrangements, estate management structures, valuation methodology, development finance and long-term investment models across England and Wales.
The difficulty for the market is uncertainty. Investors, landlords, developers, lenders and leaseholders can broadly see the direction of reform, but there remains limited certainty around timing, implementation and final drafting. That uncertainty continues to affect valuation assumptions, transactional activity and longer-term investment decisions.
A major shift in residential property law
The Government’s reform agenda represents a major structural shift in residential property law. Greater tenant protection, enhanced leaseholder rights and a gradual transition away from traditional leasehold ownership now appear firmly established within the broader policy agenda.
Nevertheless, substantial uncertainty remains. Many of the most consequential measures have yet to come into force, while others exist only in draft legislation.
For now, the real estate sector continues to wait patiently for all essential clarity.
Key developments
Renters' Rights Act 2025 now in force.
Further implementation of the Leasehold and Freehold Reform Act 2024 expected.
Ongoing legal challenges to aspects of LAFRA.
Draft Commonhold and Leasehold Reform Bill 2026 undergoing pre-legislative scrutiny.
Government remains committed to commonhold as the default tenure for new flats.