What is the Commonhold and Leasehold Reform Bill?

In late January 2026 the Government published a draft Commonhold and Leasehold Reform Bill together with an accompanying consultation: Moving to commonhold: banning leasehold for new flats. The purpose of the Bill is to ban new flats from having a leasehold use and to revert back to a commonhold basis. 

What are the problems with leasehold property?

The new Bill has been prompted by multiple problems that the owners of leasehold properties have faced in recent years, including rising ground rents and maintenance charges, and difficulties with managing agents. Leasehold ownership is also limited in terms of time. Whilst some leases can run for 999 years or longer, leases can also have far shorter periods. 

All of these issues can make it more difficult to obtain mortgages on leasehold properties, which in turn affects their value. 

What will commonhold property ownership mean?

By ensuring that all new flats are sold as commonhold properties rather than leasehold, there would no longer be a time-limit on the ownership. The owner of a commonhold property would own it for as long as they wanted, akin to owning a freehold property.  

The idea behind the new Bill is that owners of commonhold property would collectively sharing ownership and management of any communal areas through membership of a commonhold association.

It is intended that the new commonhold regime would also cover flats above commercial units and any new flats which are created as a result of the conversion of larger properties.

Who will be affected by the new commonhold regime?  

As well as giving significantly increased security to flat owners, the move to commonhold ownership rather than leasehold, will affect mortgage lenders, investors and property developers, particularly those with mixed use and/or multi-tenure scheme properties by replacing a management scheme with a unit-owner association. There will be enhanced due diligence to protect the interests for the new structure.

The Government is still fine tuning details to ensure the change can be done with ease. In the meantime existing leasehold flats will remain unaffected.

The shift to commonhold will mean that flat owners have more security over the property they live in, which in turn gives lenders greater security over the properties they lend against.

Some of the issues with the new Bill are: 

1. The owners of commonhold flats may have no experience in dealing with common areas, and there is a risk that the value of properties could be affected if they are not maintained properly;
2. The value of existing leasehold property could be negatively affected, if commonhold becomes viewed as a better way of owning property, which could make leasehold properties harder to sell;
3. It could make it more difficult for debts which are secured against commonhold property to be recovered; and
4. Any transitional arrangements affecting mortgages and other property issues will need to be considered properly.

Get advice about leasehold and commonhold property

If you are unsure as to how the new Bill may affect you, or a leasehold agreement you are a party to, we can help. Our expert property lawyers are able to advise you whether you are a leaseholder or freeholder of a property, or you are purchasing or selling a commonhold. If you need legal advice about a commonhold property, our experts will be able to assist you.

Contact us to speak to a member of our team about your leasehold or commonhold property issues.