Government Pledges to Reinvent Property Ownership with Commonhold Model
Labour has announced plans to ban the sale of new leasehold homes by the end of this parliamentary term, marking a historic shift away from what ministers have called a “feudal” property system in England and Wales.
Under the new reforms, leasehold—a system where third-party landlords own the building while residents only own individual flats—will be replaced by a commonhold structure. This change will give homeowners greater control over their buildings and service charges, removing costly ground rents and banning the forfeiture of properties.
Labour has announced plans to ban the sale of new leasehold homes by the end of this parliamentary term, marking a historic shift in the UK housing market reform. The move will see a transition from the leasehold system UK to a commonhold housing system, giving homeowners more control over their properties. This Labour leasehold ban aims to abolish ground rent in the UK, ensuring fairer property ownership changes UK and strengthening leasehold property rights. The government’s real estate law reform UK will end the “feudal” model of leasehold vs commonhold, making homeownership more transparent and affordable. With rising leasehold service charges, these reforms seek to protect homeowner rights UK and overhaul residential property laws UK to create a fairer housing system.
A white paper released on Monday outlines the government’s strategy to phase out leasehold and strengthen commonhold rights, with a full draft of the legislation expected later this year.
A Long-Awaited Overhaul of the Housing Market
Housing Minister Matthew Pennycook emphasized the government’s commitment to ending the controversial system, stating:
“This Government promised not only to provide immediate relief to leaseholders suffering now but to do what is necessary to bring the feudal leasehold system to an end – and that is precisely what we are doing.”
“By taking decisive steps to reinvigorate commonhold and make it the default tenure, we will ensure that it is homeowners, not third-party landlords, who own the buildings they live in and have a greater say in how their home is managed and the bills they pay.”
These reforms, Pennycook asserted, will eliminate unfair landlord practices and excessive service charges that have burdened millions of homeowners.
Leaseholders Welcome the Move but Demand Action for Existing Owners
Currently, England has around 4.8 million leasehold properties, making up a fifth of the country’s housing stock. Many homeowners have long complained about being trapped in poorly maintained buildings while paying exorbitant service charges.
Between 2023 and 2024, service charges rose by 11%, with leaseholders paying an average of £2,300 per year, according to estate agents Hamptons. Campaigners argue that the current system exploits homeowners and must be reformed for both new and existing leaseholders.
Katie Kendrick, founder of the National Leasehold Campaign, urged the government to ensure those already living under leasehold agreements are not overlooked.
“While focusing on preventing future leasehold abuses is crucial, it’s equally vital to address the plight of existing leaseholders currently bound by the inequitable leasehold system. Commonhold conversion mechanisms are essential to offer an escape route for those trapped.”
Labour’s Evolving Stance on Leasehold Reform
Labour’s manifesto committed to banning new leasehold flats and making commonhold the default property tenure. This pledge was reiterated in the King’s Speech, alongside promises to regulate ground rents and fast-track reforms.
However, there have been shifting timelines. In May 2023, then-shadow housing secretary Lisa Nandy pledged to abolish leasehold within Labour’s first 100 days in office. That promise was quietly dropped in April 2024.
The previous Conservative government had also attempted leasehold reform, passing the Leasehold and Freehold Reform Act in its final days. However, the legislation was significantly weakened and failed to deliver on key proposals initially championed by former Housing Secretary Michael Gove.
What’s Next?
Labour’s proposed reforms will see homeowners voting on building budgets and service charges, ensuring greater transparency and fairness. The ban on ground rent will provide financial relief, and commonhold structures will allow residents to collectively manage their properties without interference from landlords.
While the reforms promise a fresh start for new homeowners, existing leaseholders await further clarity on whether they, too, will see real relief from restrictive agreements and excessive charges.
As the government moves forward with its plans, housing campaigners will be watching closely to ensure that promises translate into action—finally putting an end to a system that has burdened homeowners for centuries.