A new report from the Housing, Communities and Local Government Committee says the government needs to go further and faster to meet leaseholders’ expectations and deliver on previous government pledges
It says that while the government’s draft Commonhold and Leasehold Reform Bill makes a significant step towards giving leasehold homeowners greater control of their buildings, an independent regulator for property management agents is needed.
The cross-party committee report recommends that the government bring forward a series of changes to the final legislation to ensure it effectively caps ground rents, gives homeowners control, and ends unreasonable fees.
Florence Eshalomi MP, chair of the HCLG Committee, stated: “Millions of leaseholders have been waiting for too long for successive governments to tackle the unfair leasehold system, cap ground rents, and put homeowners in control of the management of their buildings.
“The government’s draft Bill takes a significant step towards delivering on these objectives, but in our report, we provide a blueprint for how the final bill can meet leaseholders’ expectations and live up to previous government pledges.”
Government’s proposed ground cap rent needs to be brought forward
The report welcomes the proposed ground rent cap of £250 per year for all existing leaseholders but recommends that the government accelerate the timetable to introduce the cap by late 2027.
Leasehold reforms are not balanced enough
In the report, the committee queries the government’s evidence base for the proposed 40-year transitional period to zero ground rent and questions why a shorter transitional period of 20 years would also not represent a fair balance between leaseholders, freeholders and institutional investors.
Housing Committee recommends the regulation of property management agents
The report calls for the regulation of property management agents and states that major firms, such as FirstPort, have, for too long, delivered appalling standards of service without consequence.
The committee calls for the government to include provisions for an independent Regulator with the teeth to sanction rogue agents with penalties, including the removal of their operating licence.
Strengthening leasehold reforms for better rights
The report expresses concern that several vital recommendations previously made by the Law Commission are entirely missing from the draft bill on leasehold reforms.
The report states these measures, which the government’s manifesto promised to enact, would make it easier and more affordable for existing leaseholders to convert to commonhold.
The committee calls for the government to enact the Law Commission’s recommendations, or risk “making commonhold an unattainable escape for homeowners trapped in the leasehold system”.
Making commonhold the default outcome
The report makes a series of recommendations for technical changes that the government can make to ensure commonhold works as intended in the interests of homeowners.
In particular, the report recommends that the government should make conversion to commonhold the default outcome of a collective enfranchisement.
Eshalomi explained: “Leaseholders across England and Wales have worked hard to get on the property ladder, yet for far too many, the leasehold system has turned the homeownership dream into a living nightmare.”
“A growing number are concerned that, without urgent reform, they will be trapped in homes with rising costs and ultimately unable to sell.
“It is vital the government now recognises this urgency by bringing forward revised legislation to deliver justice for leaseholders as soon as possible. I urge the government to introduce the final bill in autumn 2026, so this will be the Parliament which finally tackles the longstanding inequities of leasehold.”
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