The Leasehold and Commonhold Reform Bill

Today the Government is unveiling the draft Leasehold and Commonhold Reform Bill. Included in the bill will be:

• A cap on ground rent at £250 a year for leaseholders in England and Wales (before ultimately reducing it to a peppercorn after 40 years);
• A ban on the creation of new leasehold flats;
• Introduction of a new process to make it easier for existing leaseholders to convert to commonhold (see our previous article explaining commonhold here);
• The abolishment of forfeiture (whereby leaseholders can lose their home and the equity they built up if they default on a debt as low as £350); and
• Introduction of a new balanced enforcement regime.

The Bigger Picture

The Leasehold Reform (Ground Rent) Act 2022 (see our previous article here) already ended ground rents for most new long residential leases going forward; this announcement focuses on tackling ground rents in older leases.

Further consultation is expected concerning the specifics of the leasehold flat ban and limited exemptions for quid pro quo leases (where the purchase price was demonstrably lower as a result of a higher level of ground rents).

Based upon current timings, the ground rent cap could come into force in late 2028.

What Next?

The bill will be published in full later today, after which we will bring you further analysis.

How Pinney Talfourd Can Help

Our Property Litigation team is closely monitoring the progress of the Bill and can advise on how the proposed changes may affect your property, your rights and your long-term position. Whether you are a leaseholder concerned about ground rent, considering conversion to commonhold, or a landlord seeking clarity on future obligations, we can provide clear, practical advice tailored to your circumstances.

If you would like to discuss how the proposed reforms may impact you, or to prepare ahead of the changes coming into force, please contact our Property Litigation team on 01708 511 000.