The Commonhold and Leasehold Reform Bill is poised to begin its passage through Parliament. This follows a commitment in the government's 2024 manifesto to abolish the leasehold system, with commonhold intended to become the default tenure.
Housing Minister Matthew Pennycook reconfirmed this commitment on April 29. He clarified that the leasehold system would not be abolished entirely, acknowledging that converting all 5 million existing leasehold properties to commonhold immediately is not possible.
The reforms will have a two-fold focus: banning the sale of new-build leasehold flats and enabling conversion to commonhold for leaseholders of existing buildings. Additionally, the government aims to improve the existing leasehold system for those who do not convert to commonhold, meaning leasehold will continue to exist.
Commonhold, first introduced in England and Wales in 2002, previously struggled due to a lack of industry support, with not all lenders offering commonhold mortgages and many agents not providing related services. However, a revised form of commonhold is now a firm legislative priority.