Summer 2026 Update: Where Are We Are On The Government’s Roadmap To Commonhold?

At the start of 2026, the Government published the draft Commonhold and Leasehold Reform Bill for pre-legislative scrutiny. Amongst the headline announcements were a cap on ground rent in existing long residential leases to £250 per year converting automatically to a peppercorn (nil) after 40 years and a ban on the sale of new flats on a leasehold basis, mandating the sale of flats on a commonhold tenure. For more details, see our Insight: Taking a deeper diver into the draft Commonhold and Leasehold Reform Bill: What do landlords and developers need to know?

The Housing, Communities and Local Government Committee subsequently published its report on the Bill on 27 May 2026 suggesting that the Government should accelerate the speed of implementation of the changes. It asked the Government to respond to the report within 2 months (for more on the report see our Insight: Commonhold and Leasehold Reform Bill: where are we now?)

The Government announced that it was unable to respond to the Housing Select Committee’s report by the end of July but intends to do so after the summer recess. It also plans to introduce a substantially amended Commonhold and Leasehold Reform Bill to Parliament in Autumn 2026, presumably incorporating the following Committee recommendations:

• Reducing ground rent to £250 in existing leases and reducing to nil after 20 years;
• Automatic conversion to commonhold after the right to collectively enfranchise is exercised;
• Set up an independent Regulator for property managing agents with enforcement powers; and
• Further changes to enfranchisement and lease extensions to implement all of the Law Commission’s recommendations with a focus on leaseholders’ election not to pay development value, permit multi-block collective freehold acquisition claims, abolish the resident landlord exception and the exclusion for a leaseholder who owns more than 3 flats and formal regulation of voluntary lease extensions and enfranchisement. 

In addition, the Government has published a new consultation on the ground rent cap in relation to quid pro-quo leases, which will close on 27 August 2026. The Government is considering an exemption to the proposed cap on ground rents in existing long residential leases at £250 per year, reducing to nil after 40 years in relation to “quid pro quo” leases. These are leases where a higher ground rent is agreed in return for a reduction in the premium payable when the lease is granted. 

The consultation seeks responses from parties who have entered into these types of arrangements. The Government proposes that the £250 ground rent cap would not apply but after 40 years, the ground rent would reduce to a peppercorn.

There are a lot of moving parts to the Government’s ambitious plans for Commonhold and Leasehold Reform. In particular, the Commonhold and Leasehold Reform Bill will bring seismic changes to residential developments by requiring all new flats to be sold on a commonhold basis, prohibiting the sale of new leasehold flats. Developers, landlords and all stakeholders in the residential sector will want engage with the Government’s proposals to ensure that they can start to prepare effectively for these changes and contribute to the discussions shaping the future implementation of Commonhold.

Please follow developments on our Essential Residential Hub and our timeline of changing landscapes in residential leasehold.

“While the precise date that a substantive response will be issued will be a decision for the new administration, it is my sincere hope that it will be provided soon after the House returns from the summer recess with a substantive Bill introduced to Parliament soon after.”