Draft legislation announced last week in the King’s Speech aimed at reforming the leasehold system, has been cautiously welcomed by the campaign group Justice for Property Rights. However, the campaign group has warned that as it stands the key provisions of the 2024 Act on leasehold reform have still not been implemented and are set to cost taxpayers billions as a result of legal action currently under appeal.
In April 2026, the Court of Appeal granted permission to appeal to several groups of freeholders who argued successfully that many provisions of the 2024 Act amount to an unlawful interference with property rights under the European Convention on Human Rights. The case is not due to be heard until late 2026 or early 2027.
The government has now committed to several housing, planning and local governance reforms in the next parliamentary session, including a new Commonhold and Leasehold Reform Bill. In January 2026, it published draft legislation which proposed making commonhold the “default tenure” for new flats by placing a statutory restriction on granting or assigning long leases of new flats.
It also proposed capping ground rents in older leases at £250 annually, reducing to a “peppercorn” (zero financial value) after 40 years, and abolishing forfeiture and replacing it with a statutory lease-enforcement scheme.
The campaign group, which represents a broad coalition of property owners, small investors and pensioners, said reform is both necessary and widely supported, but warned that poorly targeted measures risk undermining confidence in the UK’s long-standing system of property rights.
“Ground rents are a long-established part of leasehold property contracts, forming part of the overall consideration paid for a lease rather than a fee for services. While issues have arisen in specific cases, particularly involving escalating rents, these have already been subject to regulatory intervention and market correction in recent years,” said a spokesperson for the group.
Justice for Property Rights is calling on the Government to build on this progress by focusing reform where it is genuinely needed, rather than introducing blanket measures that treat all arrangements as problematic. Further, it is calling for the government to publish its draft Bill as soon as possible so that legislators and the public can assess the detail.
“Thousands of individuals have made lawful investments based on clear contractual terms. Any changes must respect those rights and provide fair treatment,” said a spokesperson for Justice for Property Rights. “If this is not taken into consideration there is the very real prospect of further legal action as asset owners will look for a fair level of compensation and while estimates vary from £18bn to in excess of £30bn, ultimately it will be the taxpayer footing the bill.”
The group has already raised concerns that blunt policy tools, such as extinguishing and capping ground rents along with devaluing the price of lease extensions, could create significant and unintended distributional effects.
Analysis shows that in some high-value property cases, these changes could result in substantial financial windfalls for wealthy leaseholders, including overseas and, in some cases shady investors, while simultaneously removing income streams from taxpaying UK-based individuals and entities.
“This is not simply a question of freeholders versus leaseholders,” the spokesperson added. “Without careful design, reforms could result in large-scale transfers of value to those least in need of support. We have already conducted detailed research into a number of examples including members of Russia’s elite and criminals, all of whom would benefit.
A central concern remains the absence of a transparent and consistent approach to compensation. To date, there is no published methodology defining “fair value” or how losses arising from changes to existing contracts would be assessed. This lack of clarity risks:
- legal uncertainty and potential challenges
- reduced investor confidence
- wider implications for the UK’s reputation for stable property rights
Justice for Property Rights is urging the Government to establish a clear, legally robust compensation framework as part of any reform package.The campaign group is calling for legislation that:
- Targets genuinely unfair practices rather than applying blanket measures
- Protects small investors and pensioners alongside leaseholders
- Distinguishes between historic, lawful arrangements and abusive cases
- Provides clear and fair compensation mechanisms
- Maintains confidence in the UK’s legal and property systems
Justice for Property Rights reiterated its support for a modernised housing system, including the long-term transition to commonhold, but cautioned that immediate reforms must be practical, proportionate, and grounded in economic reality.
“Reform what is unfair, but respect what is lawful,” the spokesperson said. “That principle must sit at the heart of any new legislation.”