Proposed Commonhold and Leasehold Reforms

Practical Impact for Flat Owners

On 27 January 2026 the Government published a draft Commonhold and Leasehold Reform Bill for pre‑legislative consideration, alongside explanatory material and a consultation on moving to “commonhold” as the default method of flat ownership and proposing to restrict the creation of new flats with the current leasehold system.   

At this stage, the proposals are not law. They indicate the direction of travel for future reform, but they do not change the legal position today. This note explains, in simple terms, what has been proposed, how it sits alongside the current law, and what it may mean in practice for existing flat owners.

How the proposed Bill fits with the law as it stands

Existing statutory rights remain fully in force. In particular:

• Lease extensions and collective enfranchisement (buying the freehold) continue to be governed by the Leasehold Reform, Housing and Urban Development Act 1993.
• The Right to Manage remains governed by the Commonhold and Leasehold Reform Act 2002.
• Ground rents in most new long residential leases being granted are already restricted by the Leasehold Reform (Ground Rent) Act 2022.
• The Leasehold and Freehold Reform Act 2024 has been enacted, but many of its provisions are not yet in force and require commencement regulations and secondary legislation in order to come into effect.

Leaseholders can continue to extend their leases, participate in collective freehold purchases and exercise right to manage rights in the usual way.

Key areas of proposed change

Ground rent: The Government proposes a cap on existing ground rents, with a long‑term move towards reducing them to a peppercorn. This would go further than the 2022 Act, which had a primary focus on new leases. These proposals are not yet in force and should not be assumed to apply when making current decisions.

Enforcement and forfeiture: The draft Bill proposes replacing the traditional forfeiture regime with a more proportionate system for dealing with arrears and breaches the leaseholder’s agreements. The Government’s intention is to reduce the risk of homeowners losing their homes for relatively modest sums, while preserving landlords’ ability to enforce legitimate obligations.

Commonhold: The commonhold ownership method already exists un the UK (since 2002), but to date has a lack of adoption due to legal limitations and difficulties converting existing leaseholds, combined with reluctance from mortgage lenders.  The commonhold framework is proposed to be modernised and re‑written, building on Law Commission recommendations of 2020, with the long‑term aim of making commonhold a workable and widely used form of flat ownership.

New flats: Alongside the draft Bill, the Government is consulting on making commonhold the default ownership structure for new flats, and on restricting or banning the grant of new long leasehold flats. This would affect future developments, not existing buildings.

Estate rent charges: The draft Bill proposes reform of certain historic enforcement powers relating to estate rent charges on freehold estates, introducing greater procedural safeguards.

What is commonhold?

Commonhold is a form of property ownership that is an alternative to the traditional Leasehold and Freehold ownership ordinarily adopted in England and Wales.  

With commonhold you own your home as a “commonhold unit” on a freehold-basis, indefinitely; there is no lease.  You and the other unit-owners collectively own and manage the building and shared areas (such as stairwells, pathways, foundations and the roof) through a ‘commonhold association’.  

Each commonhold building will have a Commonhold Community Statement (“CCS”) which sets out the rights and obligations of the unit-owners.  The main form and content of a CCS will normally be standardised but can be adapted for bespoke terms for that particular commonhold.  The CCS will also include a dispute resolution procedure, which must be followed in the event of a dispute between unit-owners.  

The appeal of commonhold is that it is not a depreciating asset – whereas leases continue to shorten and reduce in value – and it provides a structure for collaborative ownership and management of the building with your fellow unit-owners.   

Timing and uncertainty

The Bill is at draft stage only and is subject to pre‑legislative scrutiny and consultation. It would need to be introduced formally to Parliament, pass through both Houses, receive Royal Assent and then be brought into force, in many cases by further secondary legislation. It is unlikely that any legislation is likely to be in effect before 2028 and, at the time of writing, it remains unknown exactly when, or in what final form, these new proposals might take effect.

Should you await reforms? 

In most cases, homeowners should continue to make decisions based on the law as it currently stands. Draft legislation can change, and reforms may take time to be implemented.  We would caution against in delaying a lease extension, freehold purchase or RTM claim in the hope of more favourable future legislation, particularly where the remaining term of a lease continues to fall and costs may increase as a result; whether you should await reforms is a matter for personal consideration and will vary depending on your personal circumstances, so you should seek specialist advice before making a decision.   

The future 

The Government move is towards greater flat-owner protection and a more transparent, balanced system of flat ownership. However, reforms to the leasehold system have been ongoing for years; change is expected but may still not be for some years to come. Existing rights remain secure, and readily available.