Commonhold and Leasehold Reform Bill: Where are we now?

In January 2026, the Government published the draft Commonhold and Leasehold Reform Bill for pre-legislative scrutiny together with an accompanying consultation. The headline provisions included a cap on ground rents in existing leases of residential flats at £250 per year per property which will automatically convert to a peppercorn (nil) after 40 years and the mandatory requirement for developers to sell new flats on a commonhold tenure. For more details of the proposals, please see our Insight: Taking a deeper dive into the draft Commonhold and Leasehold Reform Bill: What do landlords and developers need to know?

Housing Committee Report: Conclusions and Recommendations

On 27 May 2026, the Housing, Communities and Local Government Committee published its report on the Bill following its inquiry where it received written and oral evidence from stakeholders. The Committee’s stated aim was to test the draft Bill against the Government’s stated policy objectives. The report sets out a series of conclusions and recommendations on the draft Bill. The key headlines for developers and landlords are summarised below.

Ground rent cap

The Committee acknowledges that the ground rent cap is likely to be the subject of a future judicial review but recommends that the £250 cap is introduced for 20 not 40 years before reducing to nil from 2027 (not later). It asks the Government to produce evidence to support a transitional period of 40 years.

Commonhold

The Committee is convinced that commonhold is the way forward whilst acknowledging that it will not necessarily solve all the drivers behind rising service charges such as inflation. The report recommends that both commonhold associations and existing freeholders of residential leasehold buildings should be required to hold a reserve fund. Further, changes are recommended to ensure that where the right to collectively acquire the freehold is exercised, this leads to automatic conversion to commonhold without further barriers unless the building opts out. Non-consenting leaseholders to conversion who later participate will be required to contribute to shared costs. In addition, building safety information will need to be disclosed during the enfranchisement process.

Ban on the sale of new leasehold flats

The Committee recommends that the Government closely engages with developers, mortgage lenders and other stakeholders to ensure a smooth transition to commonhold and recognises the importance of education to enable changes to operations to prepare for this seismic change.

Leasehold Reform and managing agent regulation

The headline recommendation is to require an independent Regulator for property managing agents with enforcement powers to be established within the Bill. The Committee disagree that the Government should pursue the option of mandatory qualifications for managing agents. The report also recommends that any “flaws” which the Government has identified in the Leasehold and Freehold Reform Act 2024 (“LAFRA 2024”) be addressed in the Bill. Finally, it recommends the implementation of many of the remaining Law Commission recommendations on enfranchisement and right to manage. The Committee acknowledges that it may not be possible to adopt the option of a single residential unit rather than having the existing distinction of houses and flats which is relevant both to service charges, lease extensions and enfranchisement but suggest the following Law Commission recommendations are prioritised:

• Leaseholders may elect not to pay development value during an enfranchisement claim if they agree to accept a restriction on future development.
• Permit multi-block collective freehold acquisition claims with one claim notice and nominee purchaser.
• Make certain changes to the qualifying criteria for collective enfranchisement including abolition of the resident landlord exception and removing the exclusion that a leaseholder who owns 3 or more flats in a building cannot be a qualifying tenant.
• There should be formal regulation of voluntary lease extensions and enfranchisement conducted outside of the statutory process.
• The right to manage should be extended to leasehold houses.

What Happens Next?

The report requires the Government to respond to the Committee’s recommendations within 2 months. This is a considerable undertaking given that the report extends to 165 pages. The expectation is that an amended Commonhold and Leasehold Reform Bill will be introduced to Parliament in Autumn 2026 with the aim of the Bill receiving Royal Assent by mid-2027. Alongside this, the report recommends the Government review LAFRA 2024 and take steps to incorporate any additional provisions to resolve issues with LAFRA 2024 in the new Commonhold and Leasehold Reform Bill.

This represents a significant programme of reform for the Government, encompassing wide-ranging changes to the leasehold structure, enfranchisement and the right to manage, whilst simultaneously mandating commonhold as an entirely new tenure for new-build flats. Although commonhold already exists in law, it is not widely used and the industry is not yet familiar with its practical operation. All stakeholders, including landlords and developers, will be closely monitoring the Government's response to this report as they begin to assess the practical implications and prepare for these far-reaching changes. Whilst the Committee may keen to pick up the pace, this must be balanced against the need to limit the unexpected consequences of these dramatic changes and to allow professional advisers time to take these changes on board.

We are tracking developments on our Essential Residential Hub and timeline of the changing landscapes in residential leasehold.

If you have any queries, please contact Lauren Fraser, Laura Bushaway or your usual Charles Russell Speechlys contact.