The long awaited draft Commonhold and Leasehold Reform Bill has landed!
Following the publication of the White Paper on Commonhold in March last year, the draft Commonhold and Leasehold Reform Bill landed today.
Overview: What is the bill trying to achieve?
The bill makes fundamental changes to a number of aspects of property, housing and landlord and tenant legislation; its core aim being to end the leasehold system and, by reinvigorating the model, to make commonhold the default tenure for flats.
Structure of the bill
The bill, made up of 6 parts and supported by a number of detailed schedules, attempts to deliver on the government’s manifesto commitments.
Part 1 – commonhold (core provisions of the bill)
This part rebuilds commonhold law from the ground up, repealing and replacing Part 1 of the Commonhold and Leasehold Reform Act 2002 (“the 2002 Act”).
It sets out a more structured and detailed approach to how commonhold schemes will be created, operated, and brought to an end – and of particular interest, it provides for conversion to proceed with 50% of qualifying leaseholders, rather than unanimity.
It provides detailed provisions on the Commonhold Community Statement, clarifies the functions and obligations of the commonhold association, and defines the respective rights and duties of unit‑holders and occupiers.
In addition, the bill introduces new statutory processes allowing commonhold land to be extended, partially dismantled or developed, alongside comprehensive provisions governing financial administration, compliance mechanisms and the resolution of disputes.
Part 2 – new leasehold flats
Part 2 restricts the grant of new long residential leases of flats, save where defined exemptions apply, and establishes a statutory system of remedies where such leases are granted in breach of those restrictions.
A consultation on this opened today, seeking views from the industry and consumers on questions relating to scope, exemptions, timings, transitional arrangements, and the wider commonhold legal framework – Moving to commonhold: banning leasehold for new flats – GOV.UK
The consultation remains open until 24 April 2026 and anyone in the sector is encouraged to have their say!
Part 3 – ground rent
This part imposes a cap on ground rent in existing leases to £250pa, reducing it to a peppercorn after 40 years.
My colleague, James Carpenter will be reporting on this separately.
Part 4 – enforcement of long leases
This part abolishes forfeiture in long residential leases and replaces it with a new, fairer, enforcement scheme.
Part 5 – estate rentcharges
This part repeals disproportionate enforcement powers applied to rentcharges.
Part 6 – general and miscellaneous
This part contains general provisions such as Crown application, power to make consequential amendments, Court/tribunal rules, regulations, extent and commencement/transitional provisions.
Schedules
These contain technical details on many aspects of the bill including:
- permitted lease categories;
- commonhold finance rules;
- order for sale procedures;
- rights to acquire or convert to commonhold;
- financial penalties; and
- amendments to dozens of existing pieces of legislation.
Impact of the bill
The Commonhold and Leasehold Reform Bill is not an amendment to the 2002 Act but its replacement in spirit and substance. While the 2002 Act introduced commonhold, the bill is designed to make it work, whilst simultaneously phasing out the leasehold system.
There is a long road ahead as the bill passes into pre-legislative scrutiny and through Parliament – and the devil will most certainly be in the detail.
More on this to follow from Forsters in the coming weeks and months.
Subcribe to news and viewsOver 5 million leaseholders and future homeowners will benefit from stronger control, powers and protections, through the draft Commonhold and Leasehold Reform Bill published today (Tuesday 27 January), which will fundamentally rewire homeownership across England and Wales.
https://www.gov.uk/government/news/pm-were-capping-ground-rents-at-250
