The UK government has recently announced plans to abolish the leasehold system in England and Wales — a major shake-up in how property is owned. This long-overdue reform aims to fix many of the issues leaseholders have faced for years and introduce a more modern, fairer system: commonhold.
Let’s explain what’s changing, how it might affect you, and what to do next.
Understanding Leasehold
The leasehold system has been around for centuries. Under it, homeowners own their property for a fixed term but not the land it stands on. That belongs to a separate freeholder (often a developer or investor).
This setup often leads to:
- Escalating ground rents
- High service charges
- Expensive and complex lease extensions
- Limited control over property management decisions
It can also cause frustrating delays when buying or selling a property. So, it’s no surprise many are welcoming this change with open arms.
What Is Changing?
The government plans to replace leasehold with commonhold – a system where:
- You own your individual flat or home outright
- You jointly own and manage the communal areas (like gardens, lifts, or hallways) with other residents
This removes the need for a freeholder or landlord, and there’s no lease that expires or needs extending. In short, more control for you as a homeowner, with fewer hidden charges or surprises.
Important note: commonhold isn’t the same as freehold. Freehold means owning both the land and property outright, while commonhold is a way of sharing ownership and responsibility for communal areas in blocks of flats or developments.
The Upcoming Leasehold and Commonhold Reform Bill
Expected later this year, the Leasehold and Commonhold Reform Bill will set out how the changes will be rolled out. Key proposals include:
- Ban on New Leasehold Flats: Developers will be prohibited from selling new flats under leasehold terms, making commonhold the default tenure.
- Facilitating Conversion: The bill will detail processes for existing leaseholders to convert to commonhold, aiming to make the transition straightforward and cost-effective.
What is the Impact on Current Leaseholders?
For existing leaseholders, the reforms offer opportunities to gain greater autonomy over their properties. The proposed changes include:
- Easier Lease Extensions and Freehold Purchases: Regulations effective from 31 January 2025 allow leaseholders to extend their lease or buy their freehold without a two-year waiting period.
- Improved Management Rights: The Right to Manage provisions have been expanded, enabling leaseholders to take over management of their buildings more easily.
What Happens Now?
As these reforms are implemented, homeowners and prospective buyers should take a few steps to stay ahead:
Stay Informed – Keep an eye on updates to understand your rights and options
Get Professional Advice – Especially if you’re buying or selling a leasehold property. Speak to your mortgage adviser, estate agent, or conveyancer so you're not caught out
Plan Ahead – If you're thinking about moving, remortgaging or buying your first home, this could influence your next steps
The idea is to empower homeowners, offering more control and transparency in property ownership. By replacing leasehold with commonhold, the government seeks to create a fairer housing market for everyone involved.
Whether you're a first-time buyer, planning your next move, or just want to understand how these reforms might impact your financial plans, I’d love to help. Please get in touch with me here or book directly onto my calendar here https://link.willowtree-fs.co.uk/widget/bookings/30-min-initial-appointment
Willow Tree Financial Services is a Financial Adviser firm based in Polegate, East Sussex. We specialise in:
- Financial Planning
- Mortgages
- Investment & Pension Planning
- Protection & Insurance
- Wills, Trusts & Estate Planning
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