Overhaul Of Commonhold And Leasehold On The Horizon

On 27 January 2026, a draft Commonhold and Leasehold Reform Bill was published. It represents one of the most significant shifts in property law in England and Wales in decades, aiming to modernise how certain properties are owned and managed. This is only an early version of a bill, which the Government publishes to give stakeholders the opportunity to scrutinise the proposals in detail and suggest improvements before legislation is introduced.

Key objective of the Bill is to move away from the long‑criticised leasehold system (described by some as “feudal”) toward a more transparent and resident‑controlled model. Considering there are approximately 5 million existing leasehold properties in England and Wales, the Bill, if passed, will have far-reaching implication.

The key proposed changes are the following:

1. Reinvigorating commonhold model

Commonhold is a form of ownership where property owners own the freehold of their flat or house indefinitely, while collectively sharing management of the communal areas through commonhold association. It was first introduced in 2004 through the Commonhold and Leasehold Reform Act 2002, but it was never used as a widespread form of homeownership. The Government intends for commonhold to become the default tenure in place of leasehold.

2. Ban on new long leasehold flats

The Bill confirms a commitment to restrict the use of leasehold for new flats, although certain exemptions would apply. Existing leasehold properties are not intended to be caught by the proposed ban.

3. Cap on ground rents

Ground rent is a contractual payment made by a leaseholder to a freeholder (landlord) for the right to occupy the land on which the property sits. It is separate from service charges. The Bill proposes to cap the ground rent at £250 a year, eventually reducing this to a peppercorn (effectively nil) after 40 years. The cap is likely to come into force in late 2028.

4. Abolishing the threat of forfeiture

Under the current regime, landlords are able to terminate long leases and repossess homes for relatively minor breach of lease, subject to compliance with statutory requirements. In practice, this means that leaseholders may lose their home and any equity, which has been long described as draconian. The Bill aims to abolish this system and replace it with a more proportionate enforcement regime. The new regime would still permit landlords to deal with breaches, however, there will be oversight from the courts.

5. Strengthening leaseholder rights

Enforcement powers under the current leasehold regime (exercisable under the Law of Property Act 1925) that apply to estate rentcharges are seen by the Government as disproportionate. Estate rentcharges are periodic sums charged on managed estates to recover costs for maintenance of amenities such as roads, sewers, play areas and so on. Existing provisions allow the rentcharge owner to take possession of the property until arrears are cleared. The law does not require a notice to be given; moreover, there is no financial threshold, meaning these remedies can be triggered even for very small arrears. Proposed amendments will require rentcharge owners to provide notice before enforcement action may commence.

This is just a glimpse into the sheer number of changes the Bill is poised to bring about. While this is only an initial draft and therefore subject to change, it must be said that the objective is quite clear, namely rebalancing the relationship in favour of homeowners.

At Buckles, we regularly deal with various landlord and tenant matters. Our Property Litigation department can assist in the event of a dispute involving property or land, while our Property team can assist with conveyancing and advise on your obligations as a homeowner.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.