Beyond the Bill: The journey to Commonhold continues at pace

Following the King’s Speech delivered on 13 May 2026, the government re-confirmed its intention to introduce a Commonhold and Leasehold Reform Bill (the Bill) as part of a wider programme to fundamentally reform, and ultimately phase out, the residential leasehold system in England and Wales.

The accompanying government briefing notes make clear that the proposed legislation is intended to go materially further than previous reforms (as outlined in Beyond the Bill: The journey to Commonhold starts here) and will also amend enfranchisement provisions in the Leasehold and Freehold Reform Act 2024 (LAFRA) that make it cheaper and easier for leaseholders to extend their lease or buy their freehold.  This will include the controversial valuation methodology set out in LAFRA, currently the subject of a legal challenge by affected landlords as we first discussed in R (ARC TIME Freehold Income Authorised Fund & Others) v Secretary of State for Housing, Communities and Local Government [2025] EWHC 2751 (Admin).

The government’s stated position is that leasehold is an outdated tenure model which leaves homeowners without sufficient control over their properties and building management arrangements. In its place, the government intends to promote commonhold as the default ownership structure for flats going forward.

The King’s Speech

The briefing notes indicate that the Bill will prohibit the sale of new leasehold flats, save for limited exceptions. Commonhold is intended to become the standard tenure for residential developments comprising flats. The government also proposes to introduce a new process intended to make conversion of existing leasehold buildings to commonhold easier over time, although the detail of any conversion mechanism remains awaited.

Importantly, the briefing notes expressly frame these reforms as part of a broader objective to reduce reliance on leasehold ownership altogether. The government has repeatedly referred to a desire to “end the feudal leasehold system”. The latest proposals therefore represent a further step towards the gradual replacement of leasehold with alternative ownership structures centred around direct homeowner control.

The Bill is also expected to contain significant ground rent reform measures. Most notably, the briefing notes expressly confirm the government’s intention to cap existing residential ground rents at £250 per annum reducing to a peppercorn after 40 years. The reference to an eventual peppercorn ground rent is significant. It indicates that the government’s objective is not simply to limit existing ground rents, but ultimately to phase out substantive residential ground rents altogether over time.

The government continues to frame these proposals as consumer protection measures. The stated rationale is to address affordability concerns and improve mortgageability and marketability for leaseholders. The reforms are also intended to eliminate what the government regards as unjustified income streams which are disconnected from the provision of services or active management functions.

The proposals will be of considerable importance to institutional landlords, developers, investors, managing agents and lenders with exposure to residential leasehold assets. In particular, statutory intervention affecting existing contractual ground rent income streams is likely to attract close scrutiny from the investment market. Questions will also arise regarding valuation impacts, financing structures, estate management arrangements and the practical operation of commonhold within complex mixed-use schemes and large estate environments.

At this stage, the King’s Speech and accompanying briefing notes provide only a high-level policy framework, with substantial detail still awaited. The practical implications of the proposed reforms will depend heavily on the drafting of the Bill itself, particularly in relation to commonhold conversion processes, treatment of existing leasehold interests and the scope and operation of the proposed ground rent reforms.

It is worth noting that the draft Bill, published in January 2026, included all of the above measures apart from what the briefing notes refer to as “the necessary ‘fixes’ to the Leasehold and Freehold Reform Act 2024” and provisions relating to gigabit capable broadband connections, namely the creation of new rights for leaseholders in flats to request improvements, such as a gigabit capable broadband connection.

The government has promised a further suite of reforms incorporating the remaining recommendations of the Law Commission in its 2020 report on making enfranchisement simpler and cheaper. However, the challenge for government is no longer announcing reform, but delivering clarity.

What happens next?

The Housing, Communities and Local Government Committee are currently undertaking pre-legislative scrutiny on the draft Bill and the government will consider any recommendations made by the committee before introducing the Bill.  The government will also need to review the responses to its recent consultation on banning leasehold for new flats which closed on 24 April 2026.

There is no doubt that, as the Chair of the Leasehold Advisory Service, Martin Boyd, said “This is a significant milestone for leaseholders and marks the beginning of the end for the leasehold system as we know it”.

The direction of travel has become clearer but uncertainty around the detail and timing of reform continues to create difficult market conditions – prolonged ambiguity is far harder to price and transact against. Patience across the industry is therefore wearing thin, with growing calls for reform that is clear, workable and capable of practical delivery.

How we can help

If you would learn more about the proposed reforms, you can view our webinar series here The journey to Commonhold and should you have any questions about the new legislation or need assistance with leasehold matters, contact our expert leasehold enfranchisement team to discuss how we can support you.