The Housing, Communities and Local Government (HCLG) Committee has called for accelerated reforms to the leasehold system, urging the government to strengthen its draft Commonhold and Leasehold Reform Bill. While welcoming some protections for leaseholders, the committee highlighted significant omissions and delays that risk prolonging the challenges faced by millions trapped in leasehold arrangements.

Committee calls for swifter action on leasehold reform

The HCLG Committee’s recent report acknowledges the government’s move to cap ground rents at £250 per year but criticises the proposed implementation date of 2027, advocating for the cap to come into force two years earlier. The committee also expressed concern that key recommendations from the Law Commission, which were included in the government’s manifesto, have been excluded from the draft legislation.

These missing measures are designed to simplify and reduce the costs for leaseholders wishing to convert their properties to commonhold. Without these provisions, the committee warns that commonhold could remain an “unattainable escape” for many homeowners caught in the leasehold system.

Among its recommendations, the committee proposes that conversion to commonhold should become the default outcome of collective enfranchisement, aiming to provide leaseholders with greater control and security over their homes.

Urgency emphasised by committee chair

Florence Eshalomi MP, chair of the HCLG Committee, stressed the prolonged wait endured by leaseholders for meaningful reform. She said: “Millions of leaseholders have been waiting too long for successive governments to tackle the unfair leasehold system, cap ground rents, and put homeowners in control of the management of their buildings.”

While recognising the draft bill as a significant step forward, Ms Eshalomi urged the government to use the committee’s report as a blueprint to meet leaseholders’ expectations and fulfil previous pledges. She called for the final legislation to be introduced by autumn 2026, emphasising the need for urgent action to prevent leaseholders from being trapped in homes with escalating costs and limited resale options.

Concerns over transitional period length

The National Leasehold Campaign (NLC) welcomed the committee’s report but criticised the government’s proposed 40-year transitional period to zero ground rent as excessively long. The committee has challenged the government to justify this duration or reduce it to 20 years.

Catherine Williams, co-founder of the NLC, described the 40-year timeline as effectively a “till death do us part” clause, arguing that it forces leaseholders to pay ground rent for most of their adult lives without relief. She suggested that even a 20-year period, while a compromise, would offer leaseholders a more realistic prospect of change within their lifetime.

Industry perspectives on reform progress

Dr Kion Ahadi, chief executive of LEASE, the government-funded independent body providing free legal advice on leasehold, welcomed the committee’s report. He noted that the draft bill addresses some of the most damaging aspects of leasehold, such as high and escalating ground rents, and represents a decisive shift away from leasehold as the default form of home ownership.

Dr Ahadi highlighted the potential benefits of commonhold, which include genuine control, security, and long-term certainty for homeowners. He supported the committee’s call to accelerate reforms but cautioned that careful implementation will be essential to resolve complex issues effectively.

Mark Chick, director of the Association of Leasehold Enfranchisement Practitioners (ALEP) and senior partner at Bishop & Sewell LLP, echoed the need for realism. He emphasised that while the draft bill is important, it will not immediately eliminate leasehold. The widespread adoption of commonhold could take several years, possibly up to a decade, to become fully embedded and understood across the market.

Mr Chick stressed the importance of educating leaseholders about the advantages and responsibilities of commonhold, including collective decision-making and long-term building management, to manage expectations and ensure informed choices.

What this means for landlords

For landlords, the proposed reforms signal a gradual but significant shift in property ownership structures. The move towards commonhold and the capping of ground rents could affect leasehold management and investment strategies. Landlords should prepare for a future where leasehold may no longer be the default tenure, requiring adaptation to new legal frameworks and potentially more collective involvement from homeowners in property management.

Understanding the implications of these reforms will be crucial for landlords and agents advising clients, particularly as the government aims to introduce the final bill by autumn 2026. Staying informed will help landlords navigate the transition and support leaseholders through changes in ownership and management arrangements.

Source: Based on reporting from Property118

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