Leasehold will be abolished for flats under new legislation

The UK Government has announced its next steps in a significant programme of reform to property ownership, aiming to abolish the traditional leasehold system and promote commonhold as the standard tenure for flats in England and Wales.

Person standing near apartment blocks in London

Leasehold was wiped out for new houses by the Leasehold and Freehold Act when it received Royal Assent in May 2024, one of the few measures in the Act to come into force immediately. This legislation also contains provisions to make it easier for existing leaseholders to manage their buildings, which came into force on 3 March 2025.  

Over 70% of leasehold homes in England are flats – around 4.8 million properties, representing 19% of English housing stock. In Wales, around 16% of properties are leaseholds and, according to Land Registry data, account for approximately 12% of all property transactions.

Modern looking apartments
10 Feb 2025
Leasehold Right to Manage reforms take effect on 3 March 2025

A ban on new leasehold flats

The White Paper sets out what the UK Government intends to include in their Leasehold and Commonhold Reform Bill, which will be published later in 2025.  A key proposal is to ban the sale of new flats under leasehold agreements. Instead, commonhold ownership will become the default, allowing homeowners to own their flats outright without a separate freeholder.

Promotion of commonhold ownership

Commonhold enables flat owners to collectively own and manage the entire building, fostering a more collaborative approach to property management. This model eliminates ground rents and gives homeowners direct control over maintenance and related costs.

Each property owner will become part of a commonhold association when they buy their home, which oversees both the governance and management of the building or chooses to employ a managing agent. The agent is accountable to the commonholders, not to a landlord.  

This model was recommended by the Law Commission in their 2020 report, Reinvigorating commonhold: the alternative to leasehold ownership, which highlighted the flaws in the legal framework, which means it has failed to gain popularity in England and Wales since it was introduced in 2002.

Implications for Property Professionals

Agents will need to familiarise themselves with the commonhold system, understanding its legal framework, management structures, and implications for property transactions, so they are prepared to advise clients—both buyers and sellers—on the benefits and responsibilities of commonhold ownership.

Managing agents will experience shifts in their roles, as commonhold properties involve collective management by unit owners, potentially reducing the demand for external management services.

Low rise apartment block by canal
22 Jan 2024
Solving leasehold injustice could have bigger benefits

Propertymark campaigning

We have campaigned on leasehold reform since 2017, and continue to lobby on ongoing issues affecting the buying and selling of leasehold properties.

Campaigning from Propertymark helped to the introduction of the Leasehold Reform (Ground Rent) Act in June 2022, ending ground rent for most new long residential leases granted for properties in England and Wales.

In 2018, Propertymark provided evidence to the House of Common’s Housing, Communities and Local Government Committee’s Leasehold reform inquiry and the UK Government’s consultation on making the leasehold market fairer. We were a member of the Welsh Government’s Task and Finish Group, which was set up to reform the leasehold sector. 

In 2021, Propertymark’s research, as published in our Leasehold: A Life Sentence report, was quoted in Parliament by Baroness Andrews during the Second Reading of the Leasehold Reform (Ground Rent) Bill to highlight issues around ground rents and unreasonable service charges.

Construction on new housing estate
Leasehold properties

We've been working with the National Leasehold Campaign to raise awareness of the abuse of the leasehold system in newly built homes.

Further reforms to the leasehold system will be welcome news for leaseholders up and down the country.

Propertymark has long campaigned for changes to make it cheaper and easier to buy, sell and rent leasehold property. We know that there are complications and additional costs with extending leases and property with an escalating ground rent struggles to sell, so commonhold offers an opportunity to tackle these issues. With 42 per cent of Propertymark member agents favouring abolishing the leasehold system altogether, it’s clear to see there is frustration with the current system.

However, understanding and awareness of the implications of commonhold is low. What’s key through the White Paper proposals is that any future changes make the system simpler, reduce costs and enable consumer confidence.

Timothy Douglas
Timothy Douglas Head of Policy and Campaigns | Propertymark