The UK Government has recently published the Draft Commonhold and Leasehold Reform Bill, alongside a consultation that signals a clear intention to move away from leasehold ownership and towards commonhold in the future. This is a big step and one that could have a real impact on homeowners, buyers and sellers across England and Wales. At Indigo Greens, we know that leasehold can feel confusing and, at times, frustrating. So we wanted to break down what’s being proposed, why it matters, and what it could mean for you in simple terms.
Leasehold ownership has been under scrutiny for some time. Many homeowners have struggled with rising ground rents, permission fees for relatively small changes, and uncertainty around lease lengths and extensions. These issues have also affected the sale of flats, with some buyers understandably cautious about taking on long-term costs or restrictions they don’t fully control.
After years of campaigning by Propertymark and others within the industry, the Government has now set out plans that aim to modernise the system and create a fairer way of owning flats in the future. One of the key proposals is to make commonhold the default ownership for new flats. In practice, this would mean flat owners would own their home outright, rather than leasing it for a set number of years, and would have a greater say in how their building is managed. Leasehold would still exist in certain situations, such as shared ownership, but it would no longer be the norm.
The draft Bill also looks at improving things for existing leaseholders. This includes a cap on ground rent at £250, with ground rents eventually reducing to a nominal “peppercorn” amount. It also proposes removing forfeiture and reforming estate rentcharges, both of which have caused concern for homeowners in the past.
While these changes are a positive step, there are still areas that need improvement. A 40-year wait for ground rents to reduce to a peppercorn is a long time, and ongoing costs—however small—can still affect affordability and a buyer’s willingness to proceed. There are also wider issues around permission fees, restrictive covenants and the cost and complexity of extending leases or buying the freehold, which many leaseholders continue to face.
From a sales point of view, delays caused by slow responses from freeholders or managing agents are still a common reason for transactions to fall through. Clearer, quicker information would go a long way towards making the buying and selling process smoother. The draft Bill will now be reviewed in more detail, with further consultation before it becomes law.
We’ll continue to keep a close eye on how these changes progress and what they mean for the local market here in York. If you own a leasehold property, are thinking about buying a flat, or are simply unsure how these proposals could affect you, our team at Indigo Greens is always happy to have an open, no-pressure chat. As always, our aim is to make property feel a little less complicated—and a lot more straightforward.
