Leasehold Reform and New Build Apartments: What Investors Should Check Before Buying

Most apartments in England and Wales are sold as leasehold. You own the flat for a set number of years, but not the land or the building it sits in. The terms of the lease decide your costs and what you can do with the property.

Leasehold law is changing, but not all at once. Some reforms already apply. Others, including a planned end to new leasehold flats, are still proposals. For an investor, the practical step is the same either way: read the lease terms as carefully as you read the yield.

This guide covers England. Some reforms also apply in Wales.

What has already changed?

Reform	Status
Ground rent on new leases	Under the Leasehold Reform (Ground Rent) Act 2022, most new residential long leases granted from 30 June 2022 can only charge a nominal “peppercorn” ground rent, which in practice means none.
Extending your lease straight away	Since January 2025, you no longer need to have owned a flat for two years before claiming a lease extension or a share of the freehold.
Right to Manage	Since March 2025, more buildings qualify, including mixed use buildings with up to 50% commercial space, and leaseholders usually no longer pay the freeholder’s legal costs for a claim.
Building safety	Leaseholders have protections against some costs of fixing historical safety defects.

What is still proposed?

These changes are not yet in force, so current lease terms still apply:

Cheaper, longer lease extensions: the Leasehold and Freehold Reform Act 2024 allows standard extensions of 990 years and removes “marriage value”, but these parts need further legislation before they can take effect.
Clearer service charges: standard bills and annual reports are planned, with no confirmed date.
A cap on existing ground rents: the draft Commonhold and Leasehold Reform Bill, published in January 2026, proposes capping existing ground rents at £250 a year, falling to a peppercorn after 40 years.
No more new leasehold flats: the government has consulted on banning leasehold for most new flats once a new commonhold system is ready. No start date has been set, and existing leasehold flats can still be bought and sold.

Commonhold means owning your flat outright, with the building run jointly by the owners. It is rare today, but it is the direction the government has set.

What should investors check in a lease?

Your conveyancer will review the lease in detail. These are the points worth raising early:

Tenure. Is the property leasehold, freehold or share of freehold? Some developments, particularly houses, are freehold.
Lease length. How many years are left? Under current rules, extending a lease with 80 years or less remaining usually costs more because of marriage value. Shorter leases can also be harder to mortgage and resell.
Ground rent. Is it zero, fixed, or does it rise? If it rises, how often and by how much? A new lease granted since June 2022 should usually be a peppercorn.
Service charge. What is the current budget, what has it been in previous years, and is there a reserve fund for major works? Service charges come straight out of your rental income.
Letting rights. Does the lease allow you to let the flat? Some leases restrict short lets or require consent for subletting.
Management. Who manages the building, and is the managing agent part of a redress scheme?
Insurance. How is buildings insurance arranged and charged?
Building safety. For larger blocks, ask what building safety information is available.

How leasehold terms affect your returns

Lease terms change the numbers behind a headline yield. A high service charge can turn a strong gross yield into a modest net one. A short lease can reduce resale value and limit the buyers who can get a mortgage.

When you compare developments, look at the net figure after service charges, ground rent and management. Our guide to what makes a good rental yield shows how to work this out.

If you plan to let the property, the Renters’ Rights Act also changes how tenancies work in England from 1 May 2026.

How Aspen Woolf can help

Aspen Woolf sources investment property in UK developments, including apartments and freehold homes. When you browse current properties, ask for each development’s tenure, lease length, ground rent and service charge budget before you reserve.

Once you proceed, the Completion Team keeps your purchase moving with your conveyancer.

Aspen Woolf does not provide legal advice. Your conveyancer will confirm the lease terms and what they mean for you.

Speak to an Aspen Woolf advisor about current developments.

Frequently asked questions

Is it still worth buying a leasehold flat as an investment?

It can be. Existing leasehold flats can still be bought, sold and let. What matters is the lease itself: its length, ground rent, service charge and any restrictions on letting.

Do new build flats still have ground rent?

Most new residential leases granted from 30 June 2022 can only charge a peppercorn ground rent, which in practice means none. Older leases may still have ground rent, so check the lease.

Can I extend my lease as soon as I buy?

Yes. Since January 2025, you no longer need to own the flat for two years before making a claim. Your conveyancer or a specialist surveyor can explain the cost.

Will leasehold flats be banned?

The government has proposed ending leasehold for most new flats once commonhold is ready. This is not yet law, and it would not stop existing leasehold flats being sold.