Major Shake-Up as Government Prepares to Publish Landmark Commonhold Bill
The longstanding frustrations of the UK’s leasehold sector have reached a critical inflection point. With political pressure intensifying, new data exposing systemic mis-management, and ministers pledging sweeping reform, the government is now preparing to publish the long-awaited Leasehold and Commonhold Reform Bill — a piece of legislation expected to fundamentally reshape how millions of homes in England and Wales are owned and managed.
This is not subtle reform; it is one of the most significant structural shifts in modern UK housing policy.
⚠️ A Housing System Under Strain
The leasehold tenure model — a centuries-old structure unique to England and Wales — currently affects around 5 million homes (≈1 in 5 flats in England and Wales), according to government figures. For years, leaseholders have highlighted issues such as:
Escalating ground rents
Opaque service charges
Aggressive and expensive “major works” bills
Poor building maintenance
Minimal accountability from freeholders and managing agents
Lack of democratic control over their own homes
Many of these problems stem from the fragmented, unregulated landscape of third-party managing agents overseeing communal blocks.
According to government feedback from leasehold residents, complaints over poor management, poor communication, and unexplained costs have reached record levels over the last two years.
Contextual insight: In some urban centres, leasehold flats have traded 10–15% below equivalent commonhold or freehold flats over the past five years due to concerns over escalating costs and poor management.
The FirstPort Flashpoint: Leasehold’s “Wild West” Moment
The situation escalated dramatically this autumn after renewed scrutiny of FirstPort — one of the UK’s largest managing agents, overseeing around 6,000 developments and serving roughly 1 million leaseholders across the country.
Leaseholders have raised concerns about:
Inflated service charges
Delays to essential maintenance
Unexpected multi-million-pound major works demands
Aggressive debt-collection approaches
Poor financial transparency
One parliamentary example highlighted a development where the annual service-charge budget was almost £1.9 million, yet residents struggled to reconcile where money was being allocated due to insufficient disclosure.
This prompted ministers to again describe the leasehold management market as a “wild west” — a phrase first used by Housing Minister Matthew Pennycook, who warned:
"The current leasehold system is no longer sustainable and has no place in a modern housing market."
Commonhold to Replace Leasehold: The New Default
The government's Commonhold White Paper, released earlier this year, confirmed a clear intention: to phase out leasehold for flats and make commonhold the default tenure for new developments.
Key Commitments Include:
✓ A ban on new leasehold flats
New-build flats will no longer be sold as leasehold. Developers will have to adopt a commonhold-style structure, giving flat-owners real ownership and democratic control.
✓ Commonhold made standard
Under commonhold, owners hold their property outright and collectively manage the building, meaning:
No ground rent
No remote freeholder
Transparent budgeting
Democratic decision-making on maintenance and contracts
✓ Simpler pathways for existing leaseholders
The government intends to streamline:
Freehold purchase
Lease extension
Conversion of buildings into commonhold associations
The previous two-year qualification period to extend a lease or purchase the freehold has already been removed.
✓ Regulation of managing agents
The upcoming bill is expected to introduce:
Tougher regulatory oversight
Compulsory transparency for service charges
Restrictions on excessive fees
A reform of the major works process
Stronger consumer protections
Breaking: The Draft Bill Expected Within Weeks
With the government under mounting pressure to act before the end of the parliamentary year, ministers have confirmed that the draft Leasehold and Commonhold Reform Bill will be published within weeks.
This is a major development — particularly because previous reform packages have faced delays, political stumbling blocks, and heavy lobbying from freeholders.
The draft bill is expected to include:
The legal mechanism to ban new leasehold flats
A full framework for commonhold governance
Clear conversion pathways for existing leaseholders
Timelines for phasing out ground rents
New regulatory powers to supervise managing agents
Reforms to the forfeiture process
New rules for building reserve funds and sinking-fund transparency
Timeline of Reform So Far:
2025 Jan: Government announces Commonhold White Paper
2025 Mar: Consultation confirms widespread support for reform
2025 Dec: Draft Leasehold and Commonhold Reform Bill expected within weeks
Industry experts anticipate the bill will form one of the largest housing legislative overhauls in decades, reshaping flat ownership for the next generation.
What Could Go Wrong — Risks & Considerations for Leaseholders
Despite the ambitious plans and unprecedented political momentum, the path ahead is not guaranteed smooth. Several risks could slow or complicate reform:
⚠️ Implementation Delays and Legislative Bottlenecks
Previous reform attempts stalled due to political reshuffles, industry resistance, or gaps in legislative detail. Updating the legal framework to support commonhold at national scale is substantial work — and any delays could undermine confidence and slow adoption.
⚠️ Resistance from Landlords, Freeholders and Investors
Ground rents, service-charge income, and management fees form a significant revenue stream for freeholders and investment funds. Dismantling these financial structures is likely to lead to lobbying, legal challenges, or attempts to water down key provisions of the bill.
⚠️ Cost and Complexity for Existing Leaseholders
Even with simplified rules, converting a block to commonhold is not automatic. It requires:
Majority agreement among leaseholders
Professional valuations
Legal restructuring
Administrative costs
In large, investor-heavy, or fragmented buildings, achieving this collective agreement may be difficult.
What This Means for Buyers, Sellers & Investors
The shift away from leasehold toward a strengthened, modernised form of commonhold represents one of the biggest structural transitions in the UK property market in decades. For anyone buying, selling, or investing — especially in flats — the implications are significant.
Additional stakeholders affected: Local authorities, mortgage lenders, and property developers will all need to adapt to the new governance and legal frameworks.
For Buyers: Greater Transparency, Less Long-Term Risk
If you’re purchasing an apartment today, the reforms could reshape what “ownership” really means:
More confidence in long-term asset value
Early briefings suggest the draft bill would remove escalating ground rents entirely and impose tighter oversight of service charges.A shift in negotiation power
Lease length — historically a central negotiation point — may become less relevant as leasehold is phased out.Increased lender comfort
Many lenders have previously flagged certain leasehold structures as higher risk. A more regulated environment is expected to improve mortgage availability.Clearer long-term maintenance accountability
Building owners will no longer need to navigate complex corporate structures just to understand how their building is run.
For Sellers: A Potential Boost in Demand & Marketability
Sellers stand to benefit from renewed consumer confidence:
Faster sales due to reduced buyer hesitation
Improved transparency and capped charges could attract more buyers back to the flats market.Better liquidity for short-lease properties
Flats that previously struggled to sell due to lease lengths may become far easier to transact.Potential uplift in values in well-run developments
High-quality blocks operating under the new framework may see demand rise as buyers seek secure, predictable running costs.
For Investors: A Fundamentally New Operating Landscape
Investors — particularly those focused on leasehold arbitrage or income derived from freehold ownership — will face meaningful changes:
Tighter rules on service-charge structures
Inflated or poorly justified fees will face greater scrutiny, impacting income streams for freeholders and block operators.End of short-lease uplift strategies
If lease length becomes financially irrelevant under a reformed model, the traditional “buy cheap, extend, refinance/sell” approach will shrink significantly.Higher tenant retention due to predictability
Tenants may remain longer in blocks where maintenance standards improve and costs stabilise.Premiums for well-managed blocks
Investors holding high-quality assets in prime locations could benefit as new regulatory scrutiny exposes poorly managed competitors.More institutional capital entering the sector
With clearer governance and predictable income, large-scale investors may regain confidence in the flats market.
A Turning Point for UK Property
What is happening now is historic. For decades, leasehold reform has been promised, delayed, watered down, or abandoned altogether. But the public backlash — amplified by the FirstPort controversy and mounting service-charge pressures — has shifted political will.
The government has made clear that the current system is no longer sustainable.
As we enter the close of 2025, leasehold is no longer just under review — it is being dismantled.
The property sector is on the brink of a once-in-a-generation ownership transformation.
The next few weeks will define what replaces it. Stay alert — the draft bill will set the course for the next 50 years of flat ownership in England and Wales.
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