Commonhold and Leasehold Reform Hub

Housing, Communities and Local Government Select Committee pre-legislative scrutiny of the draft Commonhold and Leasehold Reform Bill

The Housing, Communities and Local Government (HCLG) Select Committee have published their report following their pre-legislative scrutiny of the draft Commonhold and Leasehold Reform Bill.

The cross-party committee report recommends the government bring forward a series of changes to the final legislation.

Summary of the recommendations

Ground rent reform

• Bring forward the £250 ground rent cap to late 2027.
• Reconsider the proposed 40-year transition to zero ground rent and assess a shorter period (e.g. 20 years).
• The report also questions the evidence base for a transitional period of 40 years to zero ground rent and asked why not 20 years instead?
   

Regulation of property management agents

• Introduce an independent statutory regulation of property management agents.
• This would include the ability to sanction agents and remove their license to operate.
   

Enacting the Law Commission’s recommendations

• The report calls on government to enact the remaining recommendations made by the Law Commission on leasehold enfranchisement and right to manage.
   

Making commonhold the default outcome

The report makes a series of recommendations on the technical changes which the government should make to ensure commonhold works as intended in the interests of homeowners.

• Strengthen measures to ensure commonhold becomes the primary tenure for flats.
• Make conversion to commonhold the default outcome of a collective enfranchisement.
• Address practical barriers to widespread adoption.
   

Shared ownership

• Ensure fair voting rights, including for shared ownership leaseholders.
   

Land Registry

• Clarify and strengthen the role of Land Registry in implementing commonhold.
• Ensure systems are prepared for large-scale adoption.
   

Consumer Information

• Provide clear, accessible guidance for leaseholders and homeowners.
• Support understanding of complex legal and practical changes.
   

MHCLG have until 27^th July to respond to the HCLG Select Committee. 

The King’s Speech on 13 May included the Commonhold and Leasehold Reform Bill (‘the Bill’), which the government hope to pass in the next parliamentary session.

The Bill will seek to deliver: 

• Reinvigorated commonhold, making it workable for more types of building to offer full freehold ownership and greater resident control to as many as possible. 

• A ban on the use of leasehold for new flats, ensuring commonhold becomes the default tenure for flats. 

• Making it easier for existing leaseholders to convert to commonhold.

• Capping ground rents at £250 per year, changing to a peppercorn rent after 40 years. 

• Abolishing forfeiture and replacing it with a new system. 

• Repealing the powers for the enforcement of estate rent charges for homeowners on freehold estates. 

• Creating a new right for leaseholders in flats to request improvements, such as a gigabit capable broadband connection. 

• Amending enfranchisement provisions in the Leasehold and Freehold Reform Act 2024 to make it cheaper and easier for leaseholders to extend their lease or buy their freehold.
   

The King’s Speech is available here.

The King’s Speech background briefing pack is available here (see page 45 for the Commonhold and Leasehold Reform Bill).

Further information on the Bill, including a guide to the legislation and draft impact assessment, is available here.

Court of Appeal – Leasehold and Freehold Reform Act 2024 (LAFRA) 

Following the dismissal of Abacus Land 1 (HoldCo) Ltd & others in their legal challenge against the Secretary of State Housing, Communities and Local Government, with regards to the Leasehold and Freehold Reform Act 2024, an appeal is now going ahead. That appeal to the Court of Appeal is progressing and is due to be heard in early June.  

The argument being made by the freeholders is that the reforms introduced by LAFRA, reducing the cost of lease extensions/enfranchisement is a breach their human rights. The original determination is available on the Judiciary website.  

Matthew Pennycook MP, Minister for Housing and Planning, in a recent speech at the Institute of Government, was clear that any legal challenges would be robustly defended. 

RICS has submitted detailed evidence to the Housing, Communities and Local Government Committee in the UK Parliament on the Government’s draft Commonhold and Leasehold Reform Bill, setting out the challenges and opportunities presented with the proposed shift toward commonhold as the default tenure in England and Wales.

Further information can be found here.

Housing Committee examines Draft Commonhold and Leasehold Reform Bill and publishes written evidence submissions

See here for further information regarding a House of Commons Evidence session regarding Draft Commonhold and Leasehold Reform Bill pre-legislative scrutiny.

The Committee has also published written evidence submissions for the inquiry from a range of individuals, including MPs, as well as campaign groups, organisations, and firms.

On 27 January 2026, MHCLG published their draft Commonhold and Leasehold Reform Bill, a policy paper on ground rents and a consultation (closing 24 April 2026) on how proposals ban leasehold new flats can be implemented.  

The draft Bill includes the following measures:

• Reinvigorating commonhold through a comprehensive new legal framework
• Banning the use of leasehold for new flats, to ensure in future commonhold is the default tenure
• Making it easier for leaseholders to convert their homes to commonhold
• Abolishing the existing forfeiture regime, and replacing it with a lease enforcement regime
• Repealing enforcement powers that apply to estate rent charges on privately managed freehold estates
• Capping ground rents at £250 a year before changing to a peppercorn after 40 years
   

The Bill will see the introduction of a comprehensive new legal framework based on the vast majority of the recommendations made by the Law Commission in their 2020 report.

RICS are currently reviewing the proposals and will be responding to the consultation. If you are a RICS member and would like to be involved, please contact knowledge@rics.org.

High Court dismisses Judicial Review claims concerning the Leasehold and Freehold Reform Act 2024

The High Court has now dismissed a legal challenge made by Claimants representing a number of major Freeholders who had argued that certain measures introduced by the LAFRA would constitute a breach of Article 1 of the First Protocol of the European Convention of Human Rights.

The case centred around the following measures:

1. Abolition of marriage value.
2. Cap on ground rent at 0.1% of the freehold value (for valuation purposes).
3. Removal of freeholders’ rights to recover reasonable legal and valuation costs in enfranchisement claims.
    

The Claimants had argued that the measures were incompatible with the peaceful enjoyment of their possessions.  The Court accepted that the reforms interfered with property rights but found there was “robust justification” for each measure and that a “fair and proportionate balance has been struck.”

Whilst this ruling represents a win for the government, it is still possible that the Claimants could seek permission to appeal. Any appeal would likely lead to further delays in the implementation of LAFRA and the outstanding secondary legislation that is required.

Leasehold reform

Following the introduction of the Leasehold and Freehold Reform Act 2024 last year, government have now announced a new consultation which will look at introducing existing measures with the current Act and a range of new reform. The consultation is in two parts.

The first focuses on details required to implement measures from Part 4 of the Leasehold and Freehold Reform Act 2024. This includes seeking views on the detail to implement measures on:  

• Better service charge transparency, including new standardised service charge demand forms, annual reports, service charge accounts and administration charges;
• Improving buildings insurance transparency, including what information should be provided to leaseholders, so they have assurance they are getting fair value and are better able to challenge any unreasonable insurance charges; and
• Rebalancing the litigation costs regime and removing barriers for leaseholders to challenge their landlord.
   

MHCLG will implement these new measures as soon as possible and the consultation seeks to make sure that they work in practice, are proportionate and bring lasting benefit to leaseholders. 

The second part of the consultation focuses on potential new reforms.  In particular, it seeks views on: 

• Reforming the Section 20 ‘major works’ procedure that leaseholders must go through when they face large bills for such works. This includes proposals for landlord to prepare Asset Management Plans, mandating the creation of reserve funds as well as changes to the process itself (including on dispensation);
• Considering the case for greater protections for leaseholders paying fixed service charges, protections for client money, or improvements to the process for appointing a manager in cases of serious management failure (the “Section 24 process”);
• Opportunities to encourage the provision of information and services digitally to be more accessible and reduce costs, but also ensuring safeguards so that all leaseholders receive the information they need; and
• Introducing mandatory qualifications for managing agents to ensure that all agents have the knowledge and skills they need to provide a good service for leaseholders.
   

RICS will be responding to the consultation. If you would like to be involved, please contact knowledge@rics.org.

RICS' CEO also commented on the leasehold reforms announcement here.

MHCLG have announced plans to reinvigorate commonhold and make it the default tenure for new build flats, banning leasehold in the future. The changes set out in the Commonhold White Paper will include:

• New rules that will enable commonhold to work for all types of developments, including mixed-use buildings and allowing shared ownership homes within a commonhold.  
• Greater flexibility over development rights, helping developers build with confidence and maintaining safeguards for the consumer.  
• Giving mortgage lenders greater assurance with new measures to protect their stake in buildings and protect the solvency of commonholds – such as mandatory public liability insurance and reserve funds and greater oversight by commonhold unit owners to keep costs affordable.  
• Strengthening the management of commonholds, with new rules around appointing directors, clear standards for repairs, and mandating use of reserve funds.
• Providing an enhanced offer for homeowners – including requiring greater opportunities for democracy in agreeing the annual budget, clarifying how owners may change “local rules” over how a building is run and new protections for when things go wrong.
   

A new Code of Practice will set out how costs should be apportioned in commonhold, aimed at providing consumers with transparency and clarity. The government is also committed to strengthening regulation of managing agents.

The government will launch a consultation later in 2025, to ban new leasehold flats and to explore the best way forward.

MHCLG have laid secondary legislation in Parliament to commence the measures that relate to leaseholders’ right to manage (‘the RTM’) within LAFRA.

Specifically, they will commence the following sections of the LAFRA relating to RTM:

• section 49 (change of non-residential limit on RTM claims);
• section 50 (costs of RTM claims);
• section 51 (compliance with obligations arising under Chapter 1 of Part 2 of the Commonhold and Leasehold Reform Act 2002);
• section 52 (no first-instance applications to the High Court in tribunal matters);
• section 64 (restriction on recovery of non-litigation costs) insofar as it inserts section 20J of the Landlord and Tenant Act 1985 as regards the RTM.
   

They have also made consequential changes to RTM company voting rights via a negative statutory instrument (SI), to ensure that leaseholders will have effective control of a RTM company by having more votes than their freeholder.

These changes will mean that leaseholders in more mixed-use buildings will qualify for the RTM, gaining control over management of their building, their service charges and managing agent (if there is one), and leaseholders making claims will no longer have to pay their freeholder’s non-litigation costs for a claim.

In January 2025, the Housing and Planning Minister announced that he has signed regulations to remove the two-year ownership rule for leaseholders of flats to extend their lease, and leaseholders of houses to extend their lease or buy their freehold.

Written ministerial statement on leasehold and commonhold reform

On 21 November 2024 the Housing Minister published a written statement on leasehold and commonhold reform.

The statement covered existing provisions from the Leasehold and Freehold Reform Act 2024 as well as a number of new measures.

Existing provisions under the Leasehold and Freehold Reform Act

When the Leasehold and Freehold Reform Act was passed in May 2024 only the measures relating to building safety were introduced. The ministerial statement covered a number of the other provisions of the Act including:

• The removal of two-year restriction on enfranchisement and lease extensions whichcommenced in January 2025.
• Consultation on the Act’s ban on buildings insurance remuneration which will begin shortly.
• Provisions on the Right to Manage which will commence in Spring 2025.
• Consultation on valuation rates used to calculate the cost of enfranchisement premiums will take place Summer 2025. Implementation on any measures will take time due to secondary legislation and amendments to existing primary legislation.
• Consultation on new consumer protection provisions for homeowners on freehold estates, and on service charges and legal costs.
   

Further leasehold and commonhold reform

The written ministerial statement also contained a number of measures that the government have said that they will deliver. These include:

• A draft Leaseholders and Commonhold Reform Bill will be published in the second half of 2025.
• Changes to ground rents which will be delivered in legislation.
• A consultation on new reforms to section 20.
• A White Paper on reforms to commonhold which will be published  in 2025 as well as consultation on banning new leasehold flats.
  
  

Consultation will also take place on the regulation of managing agents and mandatory professional qualifications.