UK Proposes Ban on New Leasehold Flats for 5 Million Homeowners
Updated
Updated · bbc.co.uk · Jul 7
UK Proposes Ban on New Leasehold Flats for 5 Million Homeowners
3 articles · Updated · bbc.co.uk · Jul 7
Summary
Britain plans to ban new leasehold flats under a Commonhold and Leasehold Reform Bill, shifting future apartment ownership to commonhold, where residents collectively own and manage their buildings.
Around 5 million leaseholders in England and Wales have faced rising service charges and ground rents; one London owner told the BBC her annual service bill jumped from about £2,600 to more than £5,400.
The overhaul would cap ground rents at £250 before reducing them to a peppercorn after 40 years, while ending freeholders' role in new flats and abolishing repossession for unpaid service charges.
Commonhold remains largely untested in England, with only 18 developments recorded, and critics warn resident-run blocks can face payment disputes, deferred maintenance and lender reluctance.
Converting existing leasehold blocks is likely to be the hardest step, with compensation for freeholders disputed and further human-rights challenges expected even as cross-party support for reform broadens.
Could the shift to commonhold unintentionally stifle new apartment construction just when the UK needs more high-density housing?
With investors claiming £30bn in losses, can the UK abolish leasehold without a massive taxpayer-funded buyout?
If the UK's property data is fundamentally broken, how can the government possibly implement this complex reform fairly for millions of homeowners?
Ending Leasehold Flats: The 2026 Commonhold Reform and Its Impact on Homeowners and the Property Market
Overview
The government of England and Wales is driving major reforms to address long-standing problems with leasehold ownership. Building on previous legislative efforts, the Leasehold and Freehold Reform Act 2024 introduced crucial changes, and the current Labour government is pushing for greater transparency and fairness for residents. A key part of this shift is the Draft Commonhold and Leasehold Reform Bill, which aims to phase out new leasehold flats and make commonhold the default way to own flats. The reforms also seek to make it easier for existing leasehold buildings to switch to commonhold, giving residents more control over their homes.