For decades, the leasehold system in England and Wales has been described as “feudal” and outdated. If you are looking to buy a flat or leasehold house in 2026, the landscape has shifted significantly. The full implementation of the Leasehold and Freehold Reform Act has finally arrived, bringing with it some of the most substantial property law changes in a generation.
Whether you are a first-time buyer eyeing an apartment in Stockport or an investor looking at Manchester city centre, understanding these new rights is critical. Here is everything you need to know about how the 2026 reforms affect your purchase.
1. The New 990-Year Lease Extension Standard
Historically, extending a lease was a complex and expensive strategic game. Leaseholders of flats typically had the right to extend their lease by 90 years, while house owners could only extend by 50 years.
Under the new 2026 rules, this has changed dramatically. You now have the statutory right to extend your lease by a massive 990 years.
Why does this matter for a buyer?
- Security: A 990-year extension effectively makes your ownership “virtual freehold.” You will never need to worry about the lease running down again in your lifetime—or your great-grandchildren’s lifetimes.
- Value: Properties with short leases (typically under 80 years) used to suffer from “marriage value” costs, making them expensive to fix. The new Act has reformed how this is calculated, aiming to make extensions cheaper and more transparent.
If you are buying a property with a short lease, you should discuss this immediately with your solicitor. You may be able to negotiate a lower purchase price on the basis that you will exercise this new right immediately after completion.
2. Abolition of the “Two-Year Rule”
One of the biggest frustrations for leasehold buyers used to be the waiting game. Previously, you had to own a property for two years before you had the legal right to demand a lease extension. This left many new buyers in limbo, watching the cost of their future extension rise while they waited out the clock.
The two-year rule has now been abolished.
As of 2026, you can exercise your statutory right to extend your lease (or buy the freehold) from Day One of ownership. This is a game-changer for conveyancing. It allows us to factor the extension process into your purchase transaction more easily, giving you security from the moment you pick up the keys.
If you are unsure about the current length of a lease on a property you like, read our guide on freehold vs leasehold properties to understand why the remaining term is so important.
3. Ground Rent: The “Peppercorn” Revolution
Ground rent has long been a contentious issue, with some homeowners trapped in leases with doubling ground rents that made their homes unsellable.
The reform ensures that when you extend your lease under the new statutory route, the ground rent is reduced to a “peppercorn” (effectively zero). This applies to both flats and houses.
If you are buying a new leasehold retirement property or a specific type of exempt dwelling, rules may vary, so always check the contract. However, for the vast majority of leasehold extensions, the days of escalating ground rents are over.
Note for Buyers: If you are buying a property with an existing high ground rent, your solicitor will explain how the new Act allows you to extinguish this liability by extending the lease.
4. Greater Transparency on Service Charges
For flat owners, service charges are often the biggest monthly expense. In the past, freeholders could sometimes hide behind opaque accounting, making it difficult to challenge high costs for insurance or maintenance.
The 2026 reforms have introduced a standardised format for service charge invoices. Freeholders must now provide:
- Clearer breakdowns of costs.
- Annual reports on their performance.
- Proof that insurance commissions (often a hidden income stream for managing agents) are fair and transparent.
If you are currently looking at flats, make sure you understand the difference between ground rent and service charges. Our article on conveyancing searches explained details how we check the management pack to find out exactly what you will be liable to pay.
5. The Ban on New Leasehold Houses
Perhaps the most headline-grabbing change is the ban on the sale of new-build leasehold houses.
In the past, developers sometimes sold houses as leasehold to retain an income stream from ground rents. This practice has been banned. If you are buying a new build house in 2026, it should be Freehold, giving you total ownership of the land and the building.
There are very limited exceptions to this rule (primarily for shared ownership or community land trusts). If you are buying a new build and the developer mentions “leasehold,” alarm bells should ring. You can learn more about what to look for in our guide to buying a new build property.
6. Easier “Right to Manage” and Buying the Freehold
Do you want more control over your building? The new Act has made it easier for leaseholders to team up and buy their building’s freehold or take over its management (Right to Manage).
Previously, if a building had more than 25% non-residential space (like shops or offices on the ground floor), the leaseholders were blocked from buying the freehold. This threshold has been raised to 50%, opening the door for thousands of flat owners in mixed-use developments (common in Manchester and Stockport town centres) to finally take control of their building.
Next Steps for 2026 Buyers
The Leasehold and Freehold Reform Act is complex, and while it offers huge benefits, it also changes the conveyancing process. You need a solicitor who isn’t just following old habits but is actively using these new laws to your advantage.
For example, if you are buying a flat with a 75-year lease, we can advise you on serving a notice to extend it immediately upon completion, instantly adding value to your asset.
To understand more about the mechanics of this, you can read our detailed post on lease extensions explained.
Are you ready to make your move? The property market in 2026 is moving fast. Don’t let legal jargon slow you down. For a clear, upfront conversation about your purchase, contact the Gorvins Residential team today.
For further reading on the official legislation, you can visit the GOV.UK guide to Leasehold Reform.
