RICS responds to latest Government reforms on leasehold and commonhold

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.

RICS welcomes the draft Bill as a significant step towards addressing long‑standing concerns within the leasehold system. The proposed reforms, such as strengthened leaseholder rights, reforming ground rents, mandatory reserve funds, and a simplified route to commonhold, represents meaningful progress towards ending what the Government has described as the “feudal” leasehold model.

However, RICS warns that while the policy direction is positive, implementation challenges and unintended consequences remain. These include ensuring lender readiness for commonhold mortgages, the impact ground rent reform could have on future investment and loan note repayments, and ensuring consistent professional standards across managing agents, valuation, and dispute resolution activity.

Expert evidence in Parliament

To support the Committee’s scrutiny of the draft Bill, Vanessa Griffiths MRICS, Partner at Knight Frank and a member of the RICS Residential Professional Group Panel, was invited to give oral evidence in Parliament. Representing RICS, Vanessa highlighted the importance of clear guidance, robust valuation methodology, and strong professional oversight to ensure that any transition to commonhold is workable for consumers and the market.

Following the session, Vanessa said:

“There are a lot of outstanding and unanswered questions with the Commonhold and Leasehold Reform Bill in its current form, including the valuation methodology. The Bill refers back to LAFRA 2024 which still awaits further consultation and secondary legislation. The industry welcomes the opportunity to work with the Government to ensure that when this legislation does become effective, full and clear guidance is accessible, both for leaseholders and practitioners. Education, consistency and the minimisation for misinterpretation is key to making this the success the Government intends it to be.”

Key points from RICS’ written evidence

1. Support for reform, but concerns about readiness

RICS agrees that the draft Bill moves the sector closer to a fairer and more transparent tenure system. However, the transition to commonhold requires significant preparation, particularly for lenders, estate agents and conveyancers to ensure consumers are fully aware of what they are purchasing or converting.

2. Mandatory reserve funds are essential

Using experience from the Secretary of State, approved Service Charge Residential Management Code, RICS strongly supports mandatory reserve funds for both commonhold and leasehold to protect residents from unexpected major works.

3. Regulation of property agents must be included

RICS urges the Government to implement the remaining RoPA (Regulation of Property Agents) recommendations, ensuring professional competence, qualifications, and regulatory consistency across managing agents, estate agents, and letting agents. This should be supported by utilising existing professional body expertise and regulatory frameworks, such as Designated Professional Bodies to reduce duplication and costs to taxpayers.

4. Practical barriers remain for commonhold conversion

Lowering the consent threshold to 50% is helpful, but leaseholders will need access to professional advice and appropriate insurance, especially in mixed-use or higher‑risk buildings. 

5. Clarity is needed on the interaction with the Leasehold and Freehold Reform Act 2024

With parts of LAFRA 2024 still awaiting secondary legislation, RICS emphasises the need for a clear and sequenced implementation timetable to avoid further market uncertainty.