The government has reaffirmed plans to introduce commonhold as the default tenure to “stop the renewal of the leasehold system” and give homeowners back control of their homes.
Speaking at the Institute for Government, Matthew Pennycook , the minister of state for housing, communities and local government, described leasehold as a “blight” and a barrier to a “fair and efficient modern residential property market”.
The government has made abolishing leasehold a key tenet of its housing policy. A consultation proposing the introduction of a ban on the use of leasehold for new flats closed last week, with the Law Society calling for the opportunity for the conveyancing sector to prepare itself, particularly HM Land Registry and the mortgage lending market.
Documentation, systems and training must be updated ahead of any introduction, the Law Society said in its response to the consultation, and consideration should be given to a staggered implementation to enable the market to build familiarity.
In a speech full of hyperbole, Pennycook said leasehold was an “anachronism in the twenty-first century” borne out of the medieval practice of allowing ‘villeins’ or ‘serfs’ to work a plot of land, for a fixed period, on the basis that they would pay ‘in-kind’ by providing food and services to those higher up the social order, principally landowners.
He added: “The fundamental principles of that arrangement – third-party control by landlords, a temporary right to ownership that diminishes in value over time, and financial extraction through rents, charges and fees – still underpin the leasehold system today.”
Commonhold is not a just an alternative to leasehold, Pennycook explained, but a “radical improvement” on it.
“At the heart of the commonhold model is a simple principle: the people who should own buildings, and who should exercise control over their management, shared facilities and related costs are not third-party landlords but the people who live in flats within them and who have a direct stake in their upkeep.”
Pennycook cited examples of two leaseholders from his own constituency in south east London. One constituent had been subject to a 260% increase in service charges over the past four years. Another had seen inflation-linked ground rent rise to just under £800 per annum, and would likely rise to over £1000 when it was next rebased.
Despite efforts to reform leasehold, notably through the 2002 Commonhold and Leasehold Reform Act and the 2024 Leasehold and Freehold Reform Act, none tackled the “fundamentally disturbed…historical iniquities on which the present leasehold system rests,” Pennycook said.
However, he warned reform would not be a speedy process, explaining that “anyone, with even the most rudimentary knowledge of leasehold, knows that the outright and immediate abolition of circa five million English and Welsh leases is almost certainly impossible”. The Labour government’s reform of leasehold had seen progress on capping of ground rents, abolishing leasehold forfeiture, and the regulation of managing agents, he added.
Commonhold as a tenure will be “reinvigorated” through the Commonhold and Leasehold Bill published in January and will include clauses to ban the use of leasehold for new flats, the minister said.
Concluding the speech, Pennycook bullishly declared the government would “get the job done”.
“No amount of parliamentary resistance or litigation will deter us. We will do what is necessary to dismantle this archaic and iniquitous system; deliver a fair and efficient modern residential property market; and, most importantly, transform the experience of homeownership for millions of leaseholders across the country.
“Not overnight. Not in a single piece of legislation. Not recklessly. But decisively, and for good.”
Responding to Pennycook’s speech, Law Society president Mark Evans said: “The Draft Commonhold and Leasehold Reform Bill, together with this consultation, represent a significant step towards introducing commonhold as the default tenure for new flats. Commonhold aims to fix the structural separation between the person who controls the building and the people who pay for and live in it, that exists in leasehold. However, commonhold will only succeed if it operates within the realities of the housing market, the mortgage lending environment and the conveyancing process.
“The Law Society will be supporting its members in implementing the new law.”
In a statement responding to the speech, the National Leasehold Campaign – a not-for-profit organisation formed by leaseholders Katie Kendrick, Cath Williams and Jo Darbyshire – said leaseholders have run out of patience.
“What the minister has confirmed today is that he will not be deterred by complexity. He has been honest about the challenges, realistic about what can be achieved, and clear about the direction of travel towards finally ending the feudal leasehold system.
“That clarity matters. But for existing leaseholders facing escalating costs, insecurity and daily stress, intent must rapidly turn into outcomes.
“Millions have waited far too long for meaningful change. Many are losing faith that reform will ever arrive. The minister has confirmed a determination to provide existing leaseholders with genuine escape routes – and those commitments must now be realised in legislation, not postponed yet again. Every further delay compounds the injustice.
“The National Leasehold Campaign will continue to engage constructively with government, but we will also continue to apply pressure. We bring the lived experience of leaseholders directly to the table, and we will not accept reforms that fall short or fail to address the harm people face every day.”
