The government has set out its comprehensive plan to end the leasehold system in England and Wales, aiming to dismantle what it describes as a feudal and outdated property tenure. Housing Minister Matthew Pennycook MP delivered a detailed speech on 29 April 2026, outlining the steps to replace leasehold with commonhold as the default tenure and improve protections for leaseholders.
The current leasehold challenges
Leasehold ownership affects approximately five million homes in England and Wales, often causing significant financial hardship for residents. The Minister highlighted cases from his South East London constituency, where leaseholders face soaring service charges and ground rents without corresponding improvements in services. For example, one leaseholder’s service charges increased by nearly 260% over four years, while another pays ground rent approaching £800 annually for no service at all.
These examples are not isolated to London but reflect a wider systemic issue. Leasehold arrangements continue to impose excessive and escalating costs, restrictive conditions, and limited control for leaseholders over their own homes. The Minister described leasehold as “blighting lives” and a barrier to a fair and efficient modern residential property market.
Historical context and reform attempts
The leasehold system’s roots trace back to feudal times, with principles of third-party control and temporary ownership persisting into the present day. Modern leasehold emerged in the 1920s as landlords sold long leases to generate revenue while retaining land ownership. Since then, various legislative reforms have sought to protect leaseholders, including the 1967 Leasehold Reform Act, the 1985 Landlord and Tenant Act, and the 2022 Leasehold Reform (Ground Rent) Act, which abolished ground rents on new leases but left existing ones untouched.
Despite these efforts, the fundamental unfairness of leasehold remains largely unaddressed. The Minister emphasised that previous reforms, while providing relief, have not dismantled the system’s inherent inequities.
The government’s vision: ending leasehold
The government’s manifesto commitment is to bring the leasehold system to an end by the conclusion of this Parliament. However, this will not involve the immediate abolition of all existing leaseholds, which the Minister acknowledged as practically and legally unfeasible. Instead, the approach focuses on preventing new leaseholds from being created and empowering current leaseholders to gain control of their properties and transition to commonhold ownership.
Commonhold is presented as a modern alternative that places ownership and control firmly in the hands of the residents rather than third-party landlords. It allows homeowners to manage their buildings collectively, with greater say over maintenance, costs, and decision-making. The government’s draft Commonhold and Leasehold Bill, published in January 2026, aims to make commonhold the default tenure and includes measures to ban new leasehold flats, complementing the existing ban on new leasehold houses.
Supporting leaseholders and improving enfranchisement
The draft Bill also proposes a new process for converting existing leaseholds to commonhold, requiring the agreement of at least 50% of qualifying leaseholders. Additional reforms will make enfranchisement cheaper and easier, including capping ground rents at £250 and removing the need to pay marriage value in valuations. Mandatory leasebacks will prevent leaseholders from being forced to purchase expensive commercial units or non-participating leases, which can otherwise make enfranchisement prohibitively costly.
The government plans to implement these changes through separate primary legislation due to the Bill’s complexity, which is expected to contain around 260 clauses and 20 schedules. Alongside this, remaining Law Commission recommendations on enfranchisement and the Right to Manage will be enacted within the current Parliament.
Immediate protections and ongoing reforms
While the longer-term reforms progress, the government is strengthening protections for existing leaseholders. Ground rents will be capped and reduced to a peppercorn after 40 years, and leasehold forfeiture will be abolished in favour of a fairer lease enforcement system with judicial oversight. The regulation of managing agents is also being reviewed, with proposals to introduce mandatory qualifications and give leaseholders the power to switch or veto agents.
Secondary legislation will soon standardise service charge transparency, introduce fair buildings insurance fees, and rebalance legal costs to encourage leaseholders to challenge landlords when necessary. These measures form part of a complex package of statutory instruments expected to begin implementation in the coming months.
Addressing related issues: ‘fleecehold’ and estate management
The government is also tackling unfair maintenance costs and ‘fleecehold’ arrangements on privately managed estates. The draft Commonhold and Leasehold Reform Bill will repeal disproportionate enforcement powers, while consumer protections from the 2024 Act will be activated. A Law Commission project is underway to explore how homeowners on privately managed estates can gain greater control, alongside efforts to reduce the prevalence of estate management companies.
Looking ahead
The Minister acknowledged the scale and ambition of the reform programme, comparing it to the establishment of the modern leasehold system, which took nearly three decades. The government aims to complete the overhaul within five years, emphasising a methodical, sequenced, and fair approach rather than abrupt abolition. Despite challenges and opposition, the commitment to ending leasehold and transforming homeownership experiences for millions remains resolute.
Source: Based on reporting from Ministry of Housing, Communities and Local Government
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