Written Statement: Publication of draft Commonhold and Leasehold Reform Bill

I am pleased to draw members’ attention to the draft Commonhold and Leasehold Reform Bill which has been published this week for pre-legislative scrutiny in UK Parliament.

For decades, leasehold has concentrated power in the hands of freeholders, while millions of residents have been left paying the price. This imbalance has been devastating: locking people into unfair contracts, spiralling costs and a system that strips communities of control over their own homes.

The UK Government’s draft Bill proposes important and welcome changes to the law underpinning home ownership in both England and Wales. It covers a range of areas, including: 

• A cap on ground rent in existing leases of £250 per year, reducing to a peppercorn rent 40 years after the commencement of the legislation. 
• Reforms to commonhold to make it the workable alternative to leasehold it was always intended to be, following the proposals set out in last year’s White Paper.
• A ban on the use of certain long residential leases of flats from an as yet unspecified future date. The ban is intended to operate in a similar way to the ban on leasehold houses set out in the 2024 Act.
• Abolition of leasehold forfeiture for long residential leases, whereby a lease can be brought to an end if the terms of the lease are breached, which can sometimes occur for relatively minor debts. The draft Bill sets out a replacement process to address breaches via a ‘lease enforcement claim’. 
• Removal of disproportionate enforcement options for non-payment of certain types of freehold estate charges. 

Alongside the publication of the draft Bill, the UK Government has also launched a consultation on the operation of the future leasehold flat ban.

We continue to work with the UK Government on this important area of reform. As I have said before, the law underpinning leasehold is complex and challenging for ordinary homeowners to navigate effectively. Working together on a common body of reformed law will reduce complexity, maximise clarity and coherence, and ensure the new fairer reformed system applies to all.

I encourage current and prospective homeowners and any other interested stakeholders to engage with these proposals and consider responding to the consultation. 

The draft Bill and explanatory information about its proposals can be found here: Draft Commonhold and Leasehold Reform Bill - GOV.UK

The leasehold flat ban consultation can be found here: Moving to commonhold: banning leasehold for new flats - GOV.UK