Guidance

Leasehold toolkit - Wales

Published 20 May 2026

Applies to England and Wales

Toolkit purpose and summary

This toolkit aims to build awareness, understanding and confidence in the changes being introduced by the Leasehold and Freehold Reform Act 2024 (LFRA) and the draft Commonhold and Leasehold Reform Bill, and looks ahead to future changes for leasehold. It sets out what these reforms mean for leaseholders, freeholders and those involved in managing residential buildings, with clear guidance on rights, responsibilities and next steps.

These are people’s homes, and we must do right by them. The reforms are designed to make homeownership fairer, more transparent and more secure. We want leaseholders to be fully aware of their new rights.

What you’ll find inside

You’ll find practical resources that explain:

• what’s changed – new rights already in effect
• what’s coming next – future measures and timelines
• how commonhold works – the government’s vision for the future of flat ownership
• consumer protections – service charge transparency, insurance rights and building safety safeguards
• where to get help – links to free advice and professional support

How to use it

You can get involved by sharing this toolkit with leaseholders, managing agents and anyone involved in implementing these reforms. Each section is clearly labelled so you know who it’s for and how it should be used.

What is leasehold?

Understanding leasehold ownership

Leasehold means you own a right to occupy your property for a set time, but not the land it sits on. Around 5 million homes in England and Wales are leasehold, primarily flats.

What is changing

We are seeing the most significant reform to leasehold in a generation. The government is committed to implementing the LFRA as quickly as possible and published further primary legislation (the draft Bill) in January 2026.

Implementation of the LFRA, together with further measures in the draft Bill, will in due course replace an out of date, exploitative and unproductive leasehold model with a fairer, more democratic commonhold system for the future, while ensuring all homeowners enjoy greater security of tenure, control and protection from financial exploitation.

These reforms will:

• make lease extensions and freehold purchases cheaper and easier
• increase transparency around service charges and building insurance
• strengthen the right to challenge poor management
• ensure greater security and protect against unreasonable costs
• pave the way for commonhold as the future of flat ownership

Common challenges that leaseholders face

• high and harmful ground rents – annual payments that can increase significantly over time
• unreasonable service charges – costs for building maintenance, building insurance and management that can be difficult to understand and challenge
• costly lease extensions – high fees to extend a lease as it runs down in years
• difficulty buying freeholds – complex and sometimes expensive process to own a property outright.
• limited control – restricted power over how buildings are managed.
• lack of transparency – minimal information on decision making

New rights – what’s changed

Changes already in effect

Abolition of the 2-year qualifying period for lease extension and leasehold enfranchisement claims (live since January 2025)

Leaseholders no longer need to own a leasehold property for two years before taking action. Claims for a lease extension or freehold purchase can start immediately after buying a home.

Right to Manage (RTM) improvements (live since March 2025)

• increased access: buildings with mixed use (flats with shops or offices) can now access RTM if non-residential space is up to 50% (previously 25%)
• reduced costs: in most circumstances, leaseholders are no longer required to pay freeholder’s legal fees when making an RTM claim

Assured tenancy changes (2022)

From 27 December 2025, long leases (over 21 years) no longer count as assured tenancies, no matter how high the ground rent is. This removes the risk of being treated like a tenant in the private rented sector and makes it easier for leaseholders to get finance or sell their property.

What this means for leaseholders

These changes are designed to:

• save money on legal and administrative costs
• provide faster access to lease extensions or buying a freehold
• provide more control over building management
• provide protection from unfair building safety costs

What’s coming next – future timeline

The government’s implementation plan

The government is implementing the LFRA as quickly as possible through an extensive programme of secondary legislation, with consultations where necessary.

Completed consultations

1. Permitted insurance fees

The government completed a joint public consultation with the Welsh Government on proposals to stop leaseholders being charged for excessive and opaque building insurance commissions which are paid to landlords, freeholders and property.

2. Strengthening leaseholder protections over charges and services

This consultation covered proposals for England and Wales on

• service charge transparency requirements
• building insurance transparency requirements
• litigation costs reforms
• future reform priorities – including changes to the consultation process where major works are required, and regulating managing agents.

3. Leasehold flat ban

The consultation covered mechanisms to make a leasehold flat ban work effectively and making commonhold the default for new flats.

Consultations for 2026

• valuation rates – this will be a consultation on setting the rates to be used for determining the price paid for freehold purchases, lease extensions and buying out ground rent, under the measures in the LFRA.

Switching on further measures in the Leasehold and Freehold Reform Act

The government will bring the transparency measures in the LFRA into force as quickly as possible, including:

• standardised service charge demand forms
• annual reporting requirements for landlords and managing agents
• enhanced rights to obtain information
• improved insurance policy information given proactively to leaseholders

The government will commence new rules to stop leaseholders from being charged unfair or hidden commission fees by landlords, freeholders or property management companies.

We will also change the rules around litigation costs, reducing the financial burden for leaseholders who challenge unfair charges or poor property management.

• important note: The reforms to the amended enfranchisement scheme (purchasing a freehold or extending a lease) require the fixing of technical flaws in the LFRA before they can be implemented. The government intends to make these changes through primary legislation.

The government will also implement the ban on new leasehold houses in the LFRA. The government wants the bans on new leases of houses and new leasehold flats to work effectively together, so that once both are in effect, it will be prohibited to sell new leasehold homes in most circumstances.

Following consideration of feedback from the ‘Moving to Commonhold’ consultation and pre-legislative scrutiny of the draft Bill, the government will finalise commencement arrangements.

Further measures in the draft Commonhold and Leasehold Reform Bill

The draft Bill will improve the current system for existing leaseholders, while firmly establishing commonhold as the default tenure for new flats. It will:

• cap existing ground rents at £250 a year, changing to a peppercorn after 40 years. To note, this is a cap on the maximum amount that can be charged and will not increase anyone’s ground rents. Ground rents can only rise in accordance with the terms of the lease
• abolish the draconian rules that mean a leaseholder can lose their home over minor breaches of the lease, and replace it with a fairer, proportionate enforcement regime that works for both leaseholders and landlords
• make it easier for existing leaseholders to convert their buildings to commonhold
• ban the use of leasehold for most new flats

What is commonhold? The future of flat ownership

A fairer alternative to leasehold

Commonhold is a form of freehold ownership designed specifically for flats and shared buildings. It represents the government’s vision for the future of flat ownership in England and Wales.

How commonhold works

• owners hold their property outright – no lease term or expiry date
• collective management – the building is managed by a Commonhold Association made up of all homeowners
• decisions are made democratically – owners vote on budgets, rules and management decisions
• governance is standardised through a Commonhold Community Statement (CCS)

Key benefits over leasehold

• no third-party freeholder – avoids conflicts of interest and misaligned incentives
• no lease extensions needed – ownership is permanent
• no ground rent payments – eliminates this ongoing cost
• transparent service charges – controlled by owners through shared decisions and open financial governance
• true ownership – provides a greater stake in both the home and the building

The government’s vision

• commonhold will become the default ownership model for new flats
• existing leaseholders will have options to convert their properties to commonhold
• commonhold provides the security and control of freehold ownership while enabling the shared management necessary for multi-unit buildings

Understanding leaseholder protections

Key consumer rights and protections

Service charge protections

Leaseholders have specific rights regarding service charges:

• right to information – landlords provide a written summary of costs on request.
• right to challenge – leaseholders can challenge unreasonable charges at the First-tier Tribunal
• consultation rights – for major works, landlords must consult leaseholders if costs exceed certain thresholds
• protection from fraud – service charge monies must be held in trust at a regulated financial institution

Insurance rights

• landlords must provide specified information about buildings insurance on request
• leaseholders have the right to see insurance policies and summaries
• leaseholders can challenge unreasonable insurance charges through a First-tier Tribunal as they would other charges

Right to Manage

More leaseholders can take over management of a building through RTM:

• no need to prove fault with current management
• lower costs as there is now no need to pay freeholder’s legal fees in most cases
• more buildings now eligible with increased non-residential limit. • Greater control over service charges and maintenance.

Appointing a manager

If there is a significant failure by the managing agent, leaseholders can apply to the First-tier Tribunal to appoint a manager.

Where to get help and information

LEASE (Leasehold Advisory Service)

A free, independent advice service funded by the government:

• provides guidance on leasehold law and rights
• helps with disputes and understanding legal obligations.
• currently undergoing digital transformation to improve services
• website: http://www.lease-advice.org

Government resources

• GOV.UK leasehold guidance – comprehensive information on rights and responsibilities
• “How to Lease” guide – practical guidance on living in or buying a leasehold property
• Right to Manage guidance – step-by-step information for landlords and leaseholders
• Consultation documents – information on upcoming changes and how to respond.

General housing advice

• Citizens Advice – free, impartial advice on housing matters and consumer rights.

Professional support

When specialist help is needed:

• solicitors specialising in leasehold law – for legal advice and representation
• chartered surveyors – For property valuations and technical advice
• The Association of Leasehold Enfranchisement Practitioners (ALEP) – represents qualified solicitors and surveyors who can help with lease extensions and freehold purchases:
  • find a practitioner

Public Service Ombudsman

Independent dispute resolution service for housing-related complaints where the freeholder is a registered housing provider, for instance a council or housing association.

Redress schemes

Customers with a complaint about the services provided by their managing agent can complain to the scheme if the complaint cannot be resolved directly. Registering with a redress scheme as a property agent – GOV.UK