Commonhold and Leasehold Reform Bill: major reform on the way for leaseholders

Gemma Duncan provides her knowledge on how the reform to leasehold will affect public sector bodies.

The government’s draft Commonhold and Leasehold Reform Bill, published on 27 January 2026, could reshape how public sector bodies manage leasehold estates, from ground rents to enforcement regimes.

Gemma Duncan, Partner at Sharpe Pritchard, explains all.

Commonhold and Leasehold Reform Bill at a glance

On 27 January 2026 the government published its long-anticipated draft Commonhold and Leasehold Reform Bill which promises significant changes for leasehold property ownership in England and Wales.

In this latest limb of the housing reform agenda, the government proposes to remove leasehold tenure by “reinvigorating” commonhold; cap ground rents on existing leases; and replace lease forfeiture and estate rent charges with new statutory enforcement regimes.

The reforms build on changes already brought in by the Leasehold Reform (Ground Rent) Act 2022 and the Leasehold and Freehold Reform Act 2024.

What are the main proposals in the Bill?

This article sections contain:

• Commonhold: “reinvigoration”
• New flats: moving away from leasehold
• Ground rents: proposed caps
• Forfeiture: replacement with a new statutory enforcement scheme
• Estate rent charges: curbing the harshest enforcement tools

Commonhold: “reinvigoration”

The Bill proposes to overhaul the current commonhold rules contained in the Commonhold and Leasehold Reform Act 2002 by enacting the recommendations from the March 2025 Commonhold White Paper.

Commonhold property is owned outright, with no expiring term (unlike leasehold).

In buildings with multiple commonhold units all owners jointly manage the building through a commonhold association.

The draft Bill updates the framework so that it works more effectively for modern developments, including larger sites and mixed-use blocks. For example, allowing different parts of a development to be separated out so decisions and costs sit with the people who use and benefit from that part.

The bill also seeks to makes it easier for existing leaseholders to convert their building to commonhold.

New flats: moving away from leasehold

The draft Bill includes measures to ban new long residential leasehold flats with the intention that the reformed commonhold model becomes the default tenure for new flats.

The ban will be subject to permitted exceptions, the detail of which is currently subject to consultation.

Ground rents: proposed caps

The Leasehold Reform (Ground Rent) Act 2022 has already banned substantive ground rents for most new leasehold properties.

The Bill extends this principle by capping ground rents on existing leaseholds, initially at £250 per year moving to a peppercorn after 40 years.

Forfeiture: replacement with a new statutory enforcement scheme

The draft Bill proposes abolishing forfeiture for long residential leases and replacing it with a new statutory lease enforcement scheme. This is intended to allow proportionate enforcement while reducing the risk of extreme outcomes for leaseholders threatened with losing their homes over minor breaches.

Estate rent charges: curbing the harshest enforcement tools

On privately managed freehold estates, estate rent charges can be used to secure payment for shared services.

The draft Bill proposes repealing s121 and s122 of the Law of Property Act 1925 and introducing a more proportionate enforcement regime, including notice requirements before enforcement action can commence.

Next steps

This is a draft bill which will now undergo pre-legislative scrutiny by the Housing Communities and Local Government Select Committee (MHCLG) before being formally introduced to Parliament.  Alongside, MHCLG has launched the ‘Moving to Commonhold’ consultation which seeks views on how the move form leasehold to commonhold should be approached including transitions periods and permitted exemptions.

The Consultation opened on 27 January and closes on 24 April 2026 and can be accessed here Moving to commonhold: banning leasehold for new flats – GOV.UK .

The current intention is for the reforms to be introduced before the end of the current Parliamentary term in 2029.

Any questions, please don’t hesitate to get in touch with This email address is being protected from spambots. You need JavaScript enabled to view it. and her team.