Leasehold Reform Proposals Could Reshape the Property Market

Published: 29 June 2026

The Government's proposed leasehold reforms continue to move through Parliament and, if introduced, could represent one of the biggest changes to leasehold ownership in decades.

Much of the attention has focused on reducing costs for leaseholders, but the proposals could also have a significant financial impact on landlords, freeholders and investors who own ground rent portfolios.

What is changing?

One of the key proposals is to limit ground rents, with many leases eventually moving to a peppercorn (effectively zero) ground rent after a set period.

The reforms also build on previous changes to make it easier and potentially less expensive for leaseholders to extend their lease or purchase the freehold.

The aim is to create a fairer system for homeowners, many of whom have faced increasing ground rent charges and expensive lease extensions.

What could this mean for landlords?

For landlords and freeholders, the proposals could substantially reduce future income.

Ground rent has traditionally formed part of the long-term value of many investment portfolios. If that income is capped or removed, the value of those assets could fall.

Some industry experts have also suggested that pension funds and institutional investors with exposure to ground rent investments could see the value of those investments reduce.

Potential impact on new housing

There are also concerns that reducing the attractiveness of ground rent investments could make developers and institutional investors less willing to fund future residential developments.

Whether this has a noticeable impact on housing supply remains to be seen, but it is one of the issues being debated as the legislation progresses.

What should landlords do now?

Although the reforms have not yet become law, landlords may wish to start preparing by:

• Reviewing leases that contain higher or increasing ground rents.

• Assessing how the proposals could affect future rental income.

• Speaking with lenders if borrowing is secured against ground rent income.

• Keeping up to date with the progress of the legislation.

• Taking professional legal and financial advice where appropriate.

What does this mean for homeowners?

For leaseholders, the proposed reforms are intended to make owning a leasehold property simpler and more affordable over the long term.

However, until the legislation is finalised, buyers and existing leaseholders should remember that the current rules still apply. Anyone purchasing a leasehold property should continue to understand:

• The remaining lease term.

• The current ground rent provisions.

• Service charges.

• Any future costs associated with extending the lease.

How Chetwood Lloyd Mortgages can help

Leasehold properties often require additional consideration during the mortgage process, particularly where lease lengths or ground rent arrangements may affect lender criteria.

If you're buying a leasehold home, remortgaging, or simply want to understand how the proposed reforms may affect your plans, our experienced advisers are here to help.

At Chetwood Lloyd Mortgages, we provide independent, fee-free mortgage advice and can guide you through the options available, ensuring you understand both your mortgage and the wider implications of owning a leasehold property.