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Yesterday, a House of Commons select committee published its verdict on the Government's draft Commonhold and Leasehold Reform Bill — the long-awaited legislation which promises to overhaul the way flats are owned in England and Wales. The Housing, Communities and Local Government Committee launched its inquiry in February, shortly after the draft Bill was published in January 2026.
Here is what you need to know.
Why has the report been published now?
The draft Bill is a big and technically demanding piece of legislation. It rewrites a substantial part of English and Welsh land law. Publishing it in draft form gave the Committee, and the public, a chance to test it before it goes before it is formally introduced to Parliament. This is significant because three successive governments have now promised around five million leaseholders that they will fix the system and those promises remain largely undelivered.
The Committee heard from over 7,300 homeowners, took evidence from 30 witnesses, and received 187 written submissions.
What are the next steps?
The Government wants to introduce the final Bill to Parliament in the current session, and the King's Speech 2026 confirmed as much. The Committee says it should be introduced this autumn, with Second Reading before the November recess and Royal Assent by mid-2027. The Government has two months to respond to the Committee's recommendations.
That timetable is ambitious, and even if the Bill passes on schedule, most of its provisions will not take effect straight away. The Government's own estimates suggest that: the abolition of residential forfeiture would commence shortly after Royal Assent; the new commonhold model should be available before the end of this Parliament; the ground rent cap would not bite until 2028 at the earliest; and, perhaps most notably for developers, the ban on new leasehold flats is "highly unlikely" to come into force until after the next general election.
The Committee wants faster action, suggesting the ground rent cap could take effect in late 2027, a year ahead of the Government's target. Whether that is achievable is another matter.
The Bill will need substantial parliamentary time, and the Government has acknowledged that yet more primary legislation will be needed in this Parliament to deal with outstanding Law Commission recommendations on enfranchisement and the right to manage - recommendations it chose not to include in this Bill, despite promising to do so. Finding room in the legislative programme for all of this will be a real challenge.
What are the main proposed changes?
The Committee is clear that the Bill needs significant work before it is fit for Parliament. The key points are as follows.
On ground rents, the draft Bill proposes capping existing ground rents at £250 per year, falling to a peppercorn after a 40-year transitional period. The Committee wants to know why 40 years is the right number. The previous Government had proposed 20 years, and no convincing justification has been offered for doubling it. The Committee also argues that the cap should kick in automatically two months after the Act receives Royal Assent, rather than leaving it to ministers to decide when. This is politically contentious because freeholders and institutional investors who hold ground rent income streams have signalled they may mount a legal challenge on human rights grounds, and this prospect has plainly influenced the Government's cautious approach to timing.
On commonhold, the Committee recommends that when leaseholders collectively buy their freehold, conversion to commonhold should be the default outcome, not an optional extra. If adopted, this would be a meaningful practical step towards phasing out leasehold. The report also presses the Government to clarify the voting rights of shared owners during the proposed 10-year initial repair period, a gap which has left many shared owners uncertain about where they stand. The Committee is also critical of what the Bill leaves out. Several Law Commission recommendations on enfranchisement and the right to manage which the Government had previously said it would enact are missing entirely. Without them, the cost of buying a freehold or converting to commonhold may remain prohibitive for many leaseholders. The promised regulation of property managing agents is similarly absent, despite being a long-standing government commitment.
The Committee also raises concerns about the breadth of delegated powers in the draft Bill. Several so-called "Henry VIII clauses"(provisions allowing ministers to amend primary legislation by regulation), are, in the Committee's view, too widely drawn and not properly justified. Given the current political debate about the balance of power between Parliament and the executive, this is likely to attract attention as the Bill progresses.
Finally, the Bill will also need to fix mistakes in the Leasehold and Freehold Reform Act 2024 (LAFRA), the previous government's attempt at reform, which was rushed through Parliament during wash-up and remains largely unimplemented two years later. That is a sobering reminder of what happens when complex property legislation is not given sufficient time.
What this means in practice
There is no shortage of leaseholders who want the Government to move faster, and their frustration is understandable. But the real risk here is not delay — it is getting it wrong.
LAFRA showed what happens when complex property legislation is pushed through without enough care: two years on, most of its provisions still sit on the statute book gathering dust, held up by legal challenges and drafting errors. This Bill is bigger, more complex and more far-reaching. It touches the interests of leaseholders, freeholders, developers, housing associations, mortgage lenders and institutional investors. The pre-legislative scrutiny process has surfaced real obstacles - the near-certainty of judicial review over ground rent provisions, HM Land Registry's systems, and the sheer difficulty of getting an entire industry ready for a tenure model that barely exists in practice. None of these are reasons not to act, but they are reasons to act carefully.
The Committee's report is a useful roadmap. The question now is whether the Government can absorb these recommendations, resolve the outstanding policy choices, and produce a final Bill that is both ambitious enough to satisfy leaseholders and robust enough to survive the inevitable legal and political scrutiny that will follow. We will know more when the government responds and we will be watching closely.
If you would like to discuss what these reforms may mean for you, please contact the Property Litigation team.
Read the original article on GowlingWLG.com
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