The draft Bill, originally promised by the end of 2025, sets out the UK Government’s intention to move away from what it describes as a “feudal” leasehold system by reinvigorating commonhold and making it the default tenure for new flats in England and Wales. Alongside this, the Moving to Commonhold consultation seeks views on how and when leasehold should be banned for new flats, what exceptions may be required, and how the transition should be managed.
View the draft Commonhold and Leasehold Reform Bill →
Our campaign work will continue
As pre-legislative scrutiny of the draft Bill begins, Propertymark will continue to engage closely, pressing for a shorter transition to peppercorn ground rents, clarity on the ban on new leasehold flats, and robust support for agents and consumers navigating the change.
After years of campaigning, leasehold reform is finally moving from promises to action, and we will keep pushing to ensure the outcome delivers a fairer, clearer and more workable system of home ownership.
We welcome today’s announcement from the UK Government to cap ground rents and ultimately reduce them to a peppercorn rate. We know from our research with Propertymark member agents that leasehold properties with escalating ground rent will struggle to sell, even if priced correctly.
Addressing ground rents for existing leaseholders is a key step towards a fairer leasehold system. It brings existing leaseholders on par with new leaseholders, and it tackles one of the largest barriers to selling leasehold properties.
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.
What the draft Bill proposes
At its core, the draft legislation aims to make commonhold work effectively in practice, something that has not happened since it was first introduced in 2002. The Bill reforms the legal framework for commonhold, making it more flexible for modern developments, including mixed-use buildings, and simplifying the process for existing leaseholders who want to convert from leasehold to commonhold.
For new flats, the Bill paves the way for commonhold to become the default tenure, with leasehold only permitted in limited and clearly defined circumstances, such as to enable shared ownership leases, which are an important tool in the delivery of affordable homes. This is supported by the parallel consultation, which focuses on how best to ban new leasehold flats without disrupting housing supply.
The Bill also includes measures to improve conditions for existing leaseholders. These include a cap on ground rents at £250 per year, moving to a peppercorn after a 40-year transition period, the abolition of forfeiture, and reforms to estate rentcharges.
Read the guide to the Draft Commonhold and Leasehold Bill
Policy campaigning that led to action
We have lobbied for leasehold reform since at least 2017. Our research, policy papers and direct engagement with successive UK Governments have consistently highlighted how leasehold, and particularly ‘fleecehold’ and escalating ground rents, distort the housing market and undermine consumer confidence.
Our 2018 report, Leasehold: A Life Sentence?, exposed widespread dissatisfaction among leaseholders and helped build momentum for reform. Since then, we have repeatedly called for tougher action on ground rents, a ban on new leasehold properties, and better consumer understanding of tenure before purchase. We have also continued to press the case through our more recent leasehold research, showing that leasehold properties remain harder to sell and poorly understood by buyers.
This draft Bill and consultation show that years of evidence-based campaigning are finally translating into concrete UK Government action.
Ground rents: welcome progress, but not far enough
Action to tackle unregulated and unaffordable ground rents is welcome. High and escalating ground rents have caused real problems for buyers and sellers, particularly where they affect mortgage availability and delay or derail transactions.
However, we have consistently argued that ground rent should be capped at a peppercorn. While the proposed £250 cap will help many leaseholders in the short term, a 40-year transition period before ground rents fall to a peppercorn is far too long. This risks prolonging market uncertainty and continuing to suppress the saleability of some leasehold flats for decades. If the UK Government’s aim is to revitalise the market and support mobility, reform needs to deliver meaningful change sooner.
We would also like to see more action on permission fees and restrictive covenants which continue to disadvantage leaseholders, and a fairer and clearer process for lease extensions and buying freeholds.
Understanding the transition is critical
A successful move to commonhold will not happen through legislation alone. If existing leaseholders are to take up the option to convert, and if commonhold is to work smoothly for new flats, both consumers and property professionals need clear, practical support.
A lack of understanding around leasehold already causes delays, confusion and fall-throughs, and without targeted guidance and training, there is a real risk that commonhold could suffer the same fate as before, not because it is flawed, but because it is poorly understood.
Agents will be on the front line of explaining new tenure arrangements, marketing commonhold properties and advising clients. Consumers, in turn, need confidence in what commonhold means for ownership, management and long-term costs. Supporting this transition must be treated as a core part of reform, not an afterthought.
Agents and consumers will need clear guidance, education, and practical support to understand and navigate this change.
A draft Bill provides a vital opportunity for policymakers to work with the sector to get the reforms right before legislation is passed into law. It is vital that the changes come in as soon as possible to support property transactions and that the costs are reduced for consumers.
