Homeowners in England and Wales will no longer have to contend with extra costs such as ground rent under sweeping Government reforms that will ban new leasehold flats and make commonhold the default tenure.
Housing Minister Matthew Pennycook hailed the proposed changes as “the beginning of the end” for what he described as a “feudal” leasehold system, which has long subjected homeowners to unfair costs and restricted control over their properties.
Under the current leasehold structure, third-party landlords own the lease for a building, granting them significant power over decisions that affect homeowners. This has often led to spiralling ground rents, expensive service charges, and disputes over property management. The Government’s new proposals aim to put an end to this by ensuring homeowners have direct control over their buildings.
Commonhold to become the new standard
A Commonhold White Paper published on Monday confirmed the Government’s plan to “reinvigorate” commonhold through a new legal framework. The sale of new leasehold flats will be prohibited, marking a significant shift in property law.
Commonhold, an alternative form of ownership, allows homeowners to own their flat outright while jointly managing shared areas with other residents, eliminating the need for a separate landlord.
Mr Pennycook emphasised the importance of these reforms, stating:
“This Government promised not only to provide immediate relief to leaseholders suffering now but to do what is necessary to bring the feudal leasehold system to an end – and that is precisely what we are doing.”
He continued:
“By taking decisive steps to reinvigorate commonhold and make it the default tenure, we will ensure that it is homeowners, not third-party landlords, who will own the buildings they live in and have a greater say in how their home is managed and the bills they pay.”
More Read
Ending unfair costs and improving homeownership rights
The announcement is part of the Government’s broader efforts to improve housing rights and affordability, building on its Plan for Change commitments. Ministers argue that leasehold has been exploited for too long, with some homeowners finding themselves unable to sell their properties due to rising costs and restrictive terms.
With the removal of new leasehold sales, the Government aims to phase out what it sees as an outdated system. Existing leaseholders will also be supported, with a commitment to making conversion to commonhold easier.
Legislation to follow later this year
The Leasehold and Commonhold Reform Bill is set to be published later this year, detailing how the reformed commonhold system will function. The legislation will apply across England and Wales, where an estimated five million homes are currently owned under leasehold arrangements.
The move has been widely welcomed by campaigners, who have long called for an end to leasehold abuses. However, some industry experts have cautioned that the transition may face resistance from developers and managing agents who have benefitted from the existing system.
As the Government moves forward with its plan, the focus will now shift to ensuring a smooth implementation of commonhold, allowing homeowners to finally break free from restrictive leasehold agreements.
