Caroline Murray
The reforms are not yet in force but have been outlined in the draft Commonhold and Leasehold Reform Bill. The King’s Speech 2026 confirmed that the Bill will be introduced during the 2026-2027 parliamentary session.
Currently, all flats sold in England and Wales are sold on a leasehold basis, where the owner owns the right to live in the flat for 99 – 999 years, but does not own the land on which it is built or the communal buildings. The Government is proposing a ban on the use of leasehold on all new flats sold.
Under the leasehold system, the property owner pays ground rent and service charges, and the freeholder is responsible for managing the land and communal buildings.
Under the proposed commonhold system, the flat owner will own the property completely as a freeholder and share ownership of communal areas. A commonhold association will be established whereby all the flat owners in a building jointly own and manage the shared areas.
Ground rents will be capped at £250 a year, falling to a peppercorn rent within 40 years and there will be no service charge. Commonhold contributions will replace service charges, and the commonholders will set an annual budget and agree how it will be spent.
Caroline Murray, partner and head of Graysons’ property team, says:
“Commonhold is a much fairer system than leasehold. Commonholders will have more control over their property, the associated costs and how funds are spent. They will be able to alter their homes without paying a fee and will not have to worry about other unexpected fees from the freeholder.”
Leasehold reform is already underway under the Leasehold and Reform Act 2024 and is expected to be fully enacted by the end of the current Parliament in 2029. However, in April 2026, the housing minister, Matthew Pennycook, said that it is unlikely that this will include the ban on the sale of leasehold flats.
Please note that these proposals may change as the Bill passes through Parliament and that there will be some exemptions to the proposals relating to the social housing sector.
Author: Caroline Murray
