As ever, it is hard to predict exactly what the new year has in store for leasehold, but there are certain things more likely to happen than not.
The Human Rights Angle
Firstly, the appeal by the freeholders in the case of Arc Time v Secretary of State means that the story is certainly not over as regards the next steps in the Human Rights Act challenge to the Leasehold and Freehold Reform Act 2024. We know that some of the freeholders have dropped out of the challenge but at least two remain ‘in the game.’
How this will play out remains to be seen but this should be taken in the context of Matthew Pennycook’s commitment post the original court decision to “press ahead with implementing the 2004 Act.” We might assume that this may mean the changes in relation to insurance and the service charge regime with the enfranchisement elements probably waiting until much later in the year and quite possibly beyond.
In terms of timescale for the appeal, we are probably looking at a further 9-12 months in the UK and then the possibility of further moves towards Strasbourg. How long is a piece of string? The overall timeline could well be 2-3 years, or possibly more. This assumes that the case is not ‘disposed of’ here.
So personally, I don’t expect to see the major valuation changes in enfranchisement coming into effect during 2026. However, we might see some initial moves to do some of the underlying work. There is of course the much awaited ‘consultation on the deferment and capitalisation rates.’ This may well turn up during 2026 as part of laying the ground for the future reforms.
The Treasury and MHCLG
There has also been a lot of speculation about the interplay between MHCLG and the Treasury over the vexed question of ground rent reform. It was a manifesto commitment to tackle ground rent reform, but the risk for government if it gets this wrong is a big compensation bill. For that reason the ‘level’ of any cap is likely to need the Treasury’s input.
No draft bill this side of Christmas – so clearly an early new year present
The draft Leasehold and Commonhold Reform Bill was promised by the Government before the Christmas recess, but failed to materialise, due to ‘unforeseen circumstances’. Despite this latest delay, we can expect to see publication in the very early part of 2026. Assuming that the early part of the new year is full of timetabling for the scrutiny of this proposed legislation, I will look forward to putting forward comments and assisting in the progress of this bill.
What will be in the draft bill?
What else might be in the draft bill? Well, I expect to see a ban on forfeiture for residential leases and potentially some moves around ground rent as mentioned above.
Although perhaps if the ‘control of unreasonable ground rents’ (a manifesto pledge) is seen as being at risk of Human Rights scrutiny then this might feature in a separate piece of legislation. It might even be that the valuation reforms in LAFRA will be looked at again in a different way by some amending legislation with a view to try to tie these points up together and to avoid these derailing progress in relation to commonhold, which does have the opportunity to be a real ‘game changer.’
Commonhold – the future
In a recent response to MHCLG I stated on behalf of ALEP that I felt that if properly implemented (most likely for new build developments first) that commonhold will be the biggest shake up in land tenure in England and Wales for over 200 years. I really do believe that handled properly this can and will change the face of property ownership in shared structures for the better, provided that management issues are addressed from the start.
The wider picture
Other aspects of wider reforms and legislation will also have an effect during 2026. Elements of the Renters’ Rights Act 2025 will be implemented next year, including the introduction of the new tenancy regime commencing in May 2026, and further on in the year the introduction of the new Landlord’s database and the establishment of the Landlords’ Ombudsman, providing a dispute resolution service to avoid costly court proceedings.
So what next for Leasehold Reform?
As seems to usually be the case with Leasehold Reform, the future is difficult to predict, even looking just twelve months ahead. I do believe that, despite the freeholders’ appeal, implementation of the other aspects of LAFRA will continue in 2026. I also think that some of the details of the Act may start to have unintended consequences. For example, we may eventually see that reforms to building insurance commissions and the service charge demands regime could well favour larger enterprises with lower cost bases. This may lead to consolidation in the managing agent sector, resulting in a reduced market and price rises, which is certainly not what was intended.
Housing supply
We will also have to see how the planned implementation of commonhold affects housing supply (if at all). I suspect that 2026 will be a year of getting ready for implementation and will therefore see a focus on education and training for professionals and consumers in readiness for these changes.
The tribunal service
These changes together with the changes of emphasis brought about by the Renters’ Rights Act will mean renewed work pressures for the tribunal service. I think we can expect to see a flurry of cases as we have with the Building Safety Act as the detail of new legislation once it is in force is worked through.
And finally
If one thing is certain, it is that the only constant is change. With this in mind, 2026 looks certain to see major changes in the residential property space. We look forward to the draft bill and all that this will bring. In the meantime, I wish you all a peaceful and joyous Christmas and a Happy New Year.
Mark Chick – 23.12.2025
Mark Chick is the Joint Head of our expert Landlord & Tenant team.
If you have a query concerning leasehold property, then please contact the experts at Bishop & Sewell’s Landlord & Tenant team by emailing leasehold@bishopandsewell.co.uk or call on 020 7631 4141.
The above is accurate as at 23 December 2025.
The information above may be subject to change. The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis
