.png)
For millions of people across England, the dream of homeownership has been tainted by the complexities, costs, and frustrations of the leasehold system. After years of campaigning and promises, the government has taken a monumental step forward with the publication of the draft Commonhold and Leasehold Reform Bill. Here’s what it means for you.
For decades, the phrase "leasehold property" has carried a heavy caveat in the English property market. While it’s the standard way to "own" a flat, it has increasingly become synonymous with a lack of control, escalating costs, and a system that feels fundamentally stacked against the homeowner.
At D&A Solicitors, we see the practical implications of this every day. We help clients navigate complex lease extensions, battle opaque service charges, and deal with the anxiety of diminishing lease terms. We have long argued that the system is archaic and in desperate need of modernisation.
That is why the government’s recent publication of the draft Commonhold and Leasehold Reform Bill on 27th January 2026 is such a significant moment. It signals a clear intent to not just tinker around the edges, but to fundamentally reshape homeownership for millions.
While it is important to remember that this is currently a draft Bill and subject to change as it passes through Parliament, the direction of travel is clear and incredibly promising.
Here is a breakdown of the key proposals and why they matter so deeply to anyone living in, or considering buying, a leasehold property.
1. The Headline-Grabber: A Cap on Existing Ground Rents
This is the change that will have the most immediate and tangible impact on household finances. The Bill proposes a £250 annual cap on ground rents for existing leases.
For years, many leaseholders have been trapped in contracts with onerous ground rent clauses—some doubling every 10 or 15 years—making their homes unsellable and unmortgageable. The Leasehold Reform (Ground Rent) Act 2022 tackled this for new leases, reducing them to a "peppercorn" (effectively zero), but it left existing leaseholders in the cold.
This new proposal aims to right that wrong. The £250 cap would apply immediately once the legislation is in force, and after 40 years, it would reduce to a peppercorn. This could save some leaseholders thousands of pounds over their lifetime and, crucially, removes a major barrier to selling their property.
2. Banning Leasehold for New Flats
This is a truly radical step. The government is proposing to ban the creation of new leasehold flats entirely, with very limited exceptions.
Instead, the default tenure for new blocks of flats will be Commonhold.
Under a Commonhold system, there is no expiring lease and no landlord. You own your individual flat outright forever (a freehold), and you automatically become a member of a "Commonhold Association" comprising all the flat owners in the block. This association collectively owns and manages the communal areas—the hallways, roof, and grounds.
This means:
No more ground rent.
No need for costly lease extensions.
Full control over how your building is managed and how your service charge money is spent. You and your neighbours are in charge, not a remote freeholder or managing agent.
A consultation is currently underway on the practicalities of implementing this ban, but the ambition to end the "feudal" leasehold system for new homes is clear.
3. Making Commonhold a Reality for Existing Leaseholders
The Bill doesn't just look to the future; it also aims to help existing leaseholders convert their buildings to Commonhold.
Historically, converting has been notoriously difficult, requiring unanimous consent from all leaseholders and the freeholder—a near-impossible task in large blocks. The Bill seeks to reinvigorate the Commonhold framework, streamlining the conversion process and making it a genuine, workable alternative for millions of existing leaseholders who want to take full control of their homes.
4. Abolishing Forfeiture
This is a crucial piece of consumer protection. Currently, a freeholder has the draconian power of "forfeiture"—the ability to terminate a lease and take possession of a property, even for relatively small debts like unpaid ground rent or service charges. While rarely used, it is a terrifying threat that hangs over leaseholders.
The draft Bill proposes to abolish forfeiture entirely for long residential leases. It would be replaced with a new, proportionate, court-based enforcement system, ensuring that leaseholders cannot lose their biggest asset over a minor dispute.
What Does This Mean for You Right Now?
It is an incredibly exciting time, but a degree of caution is needed. This is a draft Bill. It has not yet become law, and it will face scrutiny and potential amendments as it goes through Parliament. We do not yet have a confirmed timeline for when these changes will take effect.
If you are an existing leaseholder:
Watch this space. The prospect of a ground rent cap and easier conversion to Commonhold could significantly improve your situation and the value of your property.
Don't panic sell. If you've been struggling to sell due to ground rent issues, this legislation could be the lifeline you've been waiting for.
If you are thinking of buying a leasehold property:
Proceed with your eyes open. The current system still applies. You still need a specialist conveyancing solicitor to meticulously check the lease for ground rent clauses, service charge history, and the length of the lease term.
Be aware of the future landscape. The property you buy today could operate under very different rules in a few years' time. A good solicitor will discuss these potential changes with you so you can make an informed decision.
At D&A Solicitors, we are closely monitoring every stage of this Bill's progress. We are committed to ensuring our clients are the best-informed homeowners in the market. The landscape is shifting, and we are here to guide you through it.
Call us on 0121 523 3601 or Contact Us
Disclaimer: This article is for information purposes only and does not constitute legal advice. The proposals outlined are contained in a draft Bill which is subject to change and is not yet law.
Comments
Post a Comment