THE PROPERTY FILTER TAKE
On 29 September 2026 the government said it will legislate for powers to cap leasehold permission and administration fees, with the start date to be confirmed (GOV.UK).
Until then, neither the fee caps nor the proposed ground rent cap is law, and the Leasehold and Freehold Reform Act 2024's cheaper lease extension pricing is not yet in force in England and Wales.
Consider pulling the service charge accounts and checking the fee and ground rent clauses on any leasehold flat you own or plan to buy, and price them in today.
Leasehold costs are now in the government's sights: on 29 September 2026 it said it will legislate for powers to cap the permission and administration fees landlords charge leaseholders. The start date for those caps is to be confirmed. It came six days after PropertyWire reported the National Leasehold Campaign's warning of a "second mortgage" in rising costs. PropertyWire puts the number facing it at an estimated five million leaseholders in England and Wales (PropertyWire, 23 September 2026).
What did the government announce on 29 September?
The Ministry of Housing, Communities and Local Government (MHCLG) published its release on 29 September 2026. It says the government will legislate to give the Secretary of State powers to cap permission fees. These are the fees a landlord charges to approve simple requests, such as keeping a pet. The same powers will also cover privately managed estates, where homeowners can face charges for minor cosmetic changes.
Administrative fees are in scope too. The release names charges for providing documents on request, and for simply notifying a landlord of a change in mortgage provider.
In practice this means no cap exists yet. The release says a public consultation will be launched on what should be capped and the amount for each item, and it gives no launch date. It also does not say which UK nations the caps would cover.
The same release says the government intends to introduce independent regulation of property agents. Agents would need a licence and appropriate qualifications, and a regulator would have the power to take licences away. MHCLG says the package will support over 5 million existing leaseholders and future homeowners.
Why are campaigners calling leasehold a 'second mortgage'?
Katie Kendrick OBE founded the National Leasehold Campaign. PropertyWire reported her words to The Negotiator on 23 September 2026. "Millions are being hammered by spiralling service charges, soaring insurance premiums and money-for-nothing ground rents that amount to a second mortgage," she said. A service charge is a leaseholder's share of a building's running and repair costs. Ground rent is a regular payment to the landlord, usually the freeholder (the owner of the building and the land).
Kendrick said some leaseholders are "trapped in homes they cannot sell, cannot remortgage and are struggling to keep up". If you finance flats, our guides on negotiation and property finance cover how lenders and brokers assess a deal.
The campaign's complaint is about timing. Kendrick argues that delays in bringing provisions of the 2024 Act into force are leaving leaseholders in financial distress, according to PropertyWire. PropertyWire names the law the "Leasehold and Reform Act 2024", but its title on legislation.gov.uk is the Leasehold and Freehold Reform Act 2024.
PropertyWire adds that cost and uncertainty may affect values and marketability, particularly in the flat market. For investors weighing flats against houses, our hub on property investment strategies sets out the trade-offs between approaches.
Which parts of the Leasehold and Freehold Reform Act 2024 are not yet in force?
The Act received Royal Assent on 24 May 2024 and extends to England and Wales (section 123), according to legislation.gov.uk. Section 124 brought a short list of provisions in automatically and leaves the rest to dates the Secretary of State appoints by regulations.
The new pricing for lease extensions and freehold purchases is one of the parts still waiting. According to the Leasehold Advisory Service (LEASE), those changes, including the removal of marriage value, are not yet in force. Marriage value (the extra value released when a lease and the freehold are merged) is currently payable on leases with 80 years or fewer remaining, MHCLG says.
MHCLG is blunt about the hold-up. In its valuation rates consultation, it writes: "we cannot commence these enfranchisement provisions without rectifying a small number of specific flaws in the 2024 Act through primary legislation." Enfranchisement means a leaseholder buying the freehold or extending the lease.
The fix is due in a Commonhold and Leasehold Reform Bill. LEASE reports that the Prime Minister has said the government intends to introduce it before Christmas 2026.
The draft of that Bill, published in January 2026, included proposals to cap ground rents (LEASE). MHCLG's consultation describes the proposal of 27 January 2026 as a limit of £250 a year, moving to a peppercorn (zero) rent after 40 years. It would apply to leases not covered by existing legislation.
MHCLG's consultation on deferment and capitalisation rates closed at 11:59pm on 21 October 2026, after a four-week extension (GOV.UK). These rates turn what a freeholder would receive in future, the ground rent and the reversion (the property returning to the freeholder when the lease ends), into a price today. To see what a lease extension could cost you now, try our free lease extension calculator.
What can leasehold investors consider doing now?
The start date for the fee caps is to be confirmed, and so is the start date for the new lease extension pricing. You still have options today.
First, consider asking the managing agent (the firm that runs the building for the landlord) for the service charge accounts and budget. That applies to any leasehold flat you own or plan to buy. Kendrick's warning names service charges and insurance premiums, so those figures belong in your numbers from the start.
Second, you may wish to read the lease for its ground rent review clause and any permission fee terms. Neither the fee caps nor the proposed ground rent cap is law yet.
Third, if the lease sits close to 80 years, consider getting a valuation before deciding whether to extend now or wait. The removal of marriage value is not yet in force and depends on a Bill not yet introduced, so waiting carries its own risk. You can also browse our free property resources for other planning tools.
Key takeaways
On 29 September 2026 the government said it will legislate for powers to cap leasehold permission and administration fees; the start date is to be confirmed (GOV.UK).
An estimated five million leaseholders in England and Wales face what campaigners call a "second mortgage" in costs (PropertyWire, 23 September 2026).
The Leasehold and Freehold Reform Act 2024 extends to England and Wales (legislation.gov.uk), and its new lease extension pricing, including the removal of marriage value, is not yet in force (LEASE).
MHCLG's consultation on the deferment and capitalisation rates closed at 11:59pm on 21 October 2026.
The proposed ground rent cap is £250 a year, moving to a peppercorn after 40 years, and is not yet law (MHCLG).
Frequently asked questions
When will leasehold permission and administration fees be capped?
Is marriage value still payable on a lease extension?
Why has the 2024 Act not been fully brought into force?
When is the Commonhold and Leasehold Reform Bill due?
What can a leasehold investor do now?
