Leasehold Reform Delays: Industry Bodies Demand Faster Action

The government has missed its own deadline to respond to Parliament's leasehold reform scrutiny, and a fresh wave of industry criticism is following. New Propertymark research covering more than 1,200 leaseholders shows the Leasehold and Freehold Reform Act 2024 (LAFRA) has delivered almost nothing tangible on the ground. Bodies across the sector say the direction of travel is right. They also say the pace is not.

What the New Research Shows

Propertymark published Leasehold: Still a Life Sentence? on 15 July 2026, in partnership with the National Leasehold Campaign and the Leasehold Knowledge Partnership (Propertymark, July 2026). The report drew on evidence from more than 200 member agents and 1,200 leaseholders. The numbers are difficult to ignore.

93% of leaseholders said they would not buy a leasehold property again. 86% reported a service charge (the annual fee paid to a management company to cover building maintenance and shared services) increase in the past 24 months. Of those, more than 1 in 4 saw a rise of over 60%. And 89% said challenging unfair service charges is difficult or very difficult.

Estate agents see the same picture in their pipelines. Less than 1% said selling a leasehold property had become easier in the past two years. Over 78% had taken at least one leasehold property off the market because it had become unsellable.

The National Leasehold Campaign summed it up bluntly. Progress has been "too slow, too limited, and too easily diluted". Too many leaseholders remain "unable to sell, unable to move, and facing costs they cannot afford" (National Leasehold Campaign, cited in Propertymark, July 2026).

The HMO Exposure Most Investors Miss

Here is the thing many HMO (House in Multiple Occupation) landlords do not check. If your property sits inside a leasehold block - a converted Victorian house, a purpose-built 1970s development, a modern city-centre flat - LAFRA's stalled provisions directly affect your position. The council requires you to meet your HMO licence conditions. But the freeholder (the party that owns the building outright, above each individual lease) controls the building.

That means your service charge is a direct operating cost line. 86% of leaseholders saw it rise in the last two years. HMO licence conditions often require you to maintain fire doors, communal areas, and egress routes. These costs overlap with service charge obligations and create real friction when freeholders are slow to act.

The exit risk is also worth running the numbers on. Agents identified three consistent barriers to selling leasehold flats: onerous service charges (74%), escalating ground rents (65%), and short leases (63%) (Propertymark, July 2026). Use the Property Filter lease extension calculator to understand how your remaining lease term affects both your mortgage options and your exit valuation today.

What's Coming and What to Do Now

The government is under pressure to publish the Commonhold and Leasehold Reform Bill by autumn 2026. This is the legislation designed to replace leasehold with commonhold - a system where flat owners collectively own and manage their building. The Ministry of Housing, Communities and Local Government missed the 27 July deadline to respond to the Housing Committee's pre-legislative scrutiny report (UK Parliament, 14 July 2026). Florence Eshalomi MP, the Committee's Chair, called the delay "disappointing" and urged the incoming Prime Minister to commit to the final bill in autumn 2026.

Key proposals are still waiting for legislation. The draft bill proposes capping existing ground rents (the annual fee paid to a freeholder simply for occupying the land) at £250 per year. After 40 years, that would fall to a peppercorn (a nominally zero amount). Propertymark wants that timescale cut. A ban on new leasehold flat sales also has no confirmed start date.

For HMO investors in leasehold buildings, the actionable steps are straightforward. Review your lease term. Check what your service charge covers and whether increases have been properly justified in writing. Confirm whether your managing agent meets the transparency requirements already in force under the Leasehold and Freehold Reform Act 2024. Our property investment strategies hub covers how leasehold tenure affects HMO acquisition and exit criteria in more detail. If your lease is approaching 80 years, explore extension options now. Browse our free resources for further tools to help you assess the position.

Key takeaways

• 93% of leaseholders surveyed by Propertymark say they would not buy leasehold again, with nearly a decade of reform producing little visible change.

• 86% of leaseholders saw service charges rise in the past 24 months; more than 1 in 4 saw increases above 60%.

• Over 78% of estate agents have removed at least one leasehold property from the market as unsellable in the past two years.

• The government missed the 27 July 2026 deadline to respond to Parliament's pre-legislative scrutiny report, with the Housing Committee calling for the final Commonhold and Leasehold Reform Bill by autumn 2026.

• Ground rent caps (at £250 per year) and the ban on new leasehold flat sales are still not in force.