Justice for Property Rights has responded cautiously to the Government’s proposed Leasehold and Commonhold Reform Bill announced in the King’s Speech yesterday, warning that unresolved legal challenges surrounding the 2024 Leasehold Act could ultimately cost taxpayers billions of pounds.
The campaign group says it broadly supports modernising the leasehold system, including a long-term transition towards commonhold but warns that poorly designed reforms risk undermining confidence in UK property rights and triggering substantial compensation claims.
Its concerns centre on the ongoing legal appeal against provisions contained within the Leasehold and Freehold Reform Act 2024.
In April 2026, the Court of Appeal granted permission for several groups of freeholders to challenge aspects of the legislation, arguing that elements of the Act amount to unlawful interference with property rights under the European Convention on Human Rights. The appeal is not expected to be heard until late 2026 or early 2027, potentially delaying implementation of key reforms.
FURTHER REFORMS
The Government has already indicated it intends to bring forward further reforms through a new Commonhold and Leasehold Reform Bill, including proposals to make commonhold the default tenure for new flats, restrict the granting of new leaseholds, cap older ground rents at £250 per year before reducing them to a peppercorn after 40 years, and abolish forfeiture.
Justice for Property Rights says reform should focus on genuinely unfair practices rather than imposing blanket changes across the sector.
The group argued that many ground rent arrangements were entered into lawfully and form part of wider contractual agreements between leaseholders and freeholders.
MARKET CORRECTION
A spokesperson for Justice for Property Rights says: “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.”
The organisation warns that failing to provide clear compensation mechanisms could lead to further legal action and significant costs for the public purse.
“Thousands of individuals have made lawful investments based on clear contractual terms. Any changes must respect those rights and provide fair treatment,” the spokesperson adds.
“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.”
UNINTENDED BENEFITS
The group also raises concerns that some reforms could unintentionally benefit wealthy leaseholders and overseas investors while negatively impacting UK-based pensioners and smaller investors reliant on ground rent income.
“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.”
LEGAL UNCERTAINTY
Justice for Property Rights says the absence of a published methodology for calculating compensation continues to create legal uncertainty and risks damaging investor confidence in the UK property market.
The campaign group is calling on the Government to publish draft legislation as soon as possible and establish what it describes as a “clear, legally robust compensation framework” before further reforms are introduced.
“Reform what is unfair, but respect what is lawful,” the spokesperson says. “That principle must sit at the heart of any new legislation.”
