Leasehold Reform 2026: What Overseas Buyers Need to Know Before Buying a UK Flat
The UK's leasehold system is being overhauled, and the draft Commonhold and Leasehold Reform Bill will change what a flat purchase actually looks like for buyers going forward.
This Banke guide covers what's changing and what to factor in now.
The Ground Rent Cap
The draft Bill, published in January 2026, proposes capping existing ground rents at £250 a year, reducing to a peppercorn (£0) after 40 years. The government estimates this could save many leaseholders over £4,000 across their lease. As of mid-2026, the government has signalled it may bring the cap forward to late 2027 following political pressure.
Commonhold Becomes the Default
Under the reforms, commonhold — not leasehold — becomes the default tenure for new-build flats, with leasehold effectively banned for new residential developments. The Bill also proposes cutting the threshold for existing blocks to convert to commonhold to 50% of owners, down from a higher bar that previously blocked many buildings from converting.
What This Means If You're Buying Now
These reforms are still in draft and need parliamentary approval — the government committed in September 2026 to progressing the Bill this parliamentary session, but it isn't law yet. If you're buying an existing leasehold flat, check the current ground rent and lease length carefully, since the reforms will phase in rather than apply retroactively overnight. A new-build purchase should increasingly be offered as commonhold rather than leasehold as developers adjust to the incoming rules.
Talk to Banke
Contact Banke to check the tenure and ground rent terms on a specific property before you make an offer.