Residential leasehold, freehold and commonhold reform

Draft Commonhold and Leasehold Reform Bill

The Housing, Communities and Local Government Committee which was undertaking pre-legislative scrutiny of the draft Commonhold and Leasehold Reform Bill published its report on the draft Bill on 27 May 2026. A summary of the Committee’s recommendations is here.

The government was required to respond to the report by 27 July 2026. However, a letter from Matthew Pennycook MP, Minister of State for Housing and Planning dated 10 July 2026 states that 'as a result of the announcement made by the Prime Minister on 22 June that he was resigning as Prime Minister and leader of the Labour Party, and the associated constraints on government business in the period ahead of the summer recess, including the prohibition on initiating new policy commitments, my Department will regrettably be unable to issue a response to the Committee’s report before its deadline of 27 July'. The letter further notes that 'While the precise date that a substantive response will be issued will be a decision for the new administration, it is my sincere hope that it will be provided soon after the House returns from the summer recess with a substantive Bill introduced to Parliament soon after'. On publication of the letter, Florence Eshalomi MP, Chair of the Housing, Communities and Local Government (HCLG) Committee expressed disappointment at the delay.

On 2 July 2026 the government published a consultation seeking views on whether 'quid pro quo' leases should be exempt from or treated differently in the government's proposed cap on ground rents in residential leases. This would be relevant where a higher ground rent is agreed between the leaseholder and freeholder for a corresponding reduction in premium.

This consultation is open until 27 August 2026 and seeks views on:

• whether there should be an exemption
• how it should be defined
• how it should work.

Leasehold and Freehold Reform Act 2024

On 15 July 2026, Matthew Pennycook made a statement setting out the next phase for implementation of the LFRA 2024.

The statement notes that in order to ensure more leaseholders are able to convert to commonhold various measures in the LFRA 2024 need to be implemented.

The statement notes that the government has been constrained from implementing the LFRA 2024’s enfranchisement measures to date ‘by the fact that legislation contains a small number of specific flaws’. The statement notes that the ‘King’s Speech 2026 confirmed that fixes to these flaws will be included in the forthcoming Commonhold and Leasehold Reform Bill’ (although this is of course itself subject to an unclear timetable – see above).

In the interim, on 15 July 2026 the government launched two technical consultations to ensure that it can ‘commence the 2024 Act’s enfranchisement provisions as soon as possible following Royal Assent of the Commonhold and Leasehold Reform Bill’:

• Leasehold enfranchisement valuation rates: The consultation seeks views on prescribing the valuation rates used in leasehold enfranchisement claims under the LFRA 2024.
• Leasehold enfranchisement process costs: This consultation seeks views on exceptions to the rule that parties pay their own process costs in leasehold transactions under the Leasehold and Freehold Reform Act 2024.

Both consultations are open until 23 September 2026.

The government has also published a response to its 4 July 2025 consultation ‘Strengthening leaseholder protections over charges and services’ in relation to those proposals in the consultation relating to Part 4 of the 2024 Act.

The response which was published on 15 July 2026 notes that the government intends to:

• introduce an annual report to give leaseholders an insight into the health and condition of their building, plans for forthcoming major works and other useful information. The government will prescribe the form and contents of the annual report.
• introduce a standardised service charge demand form.
• prescribe a new future demand notice which will provide leaseholders with key information about why they may face a delayed demand for a service charge payment and when that demand is expected to be made. The government notes its plans to commence this measure as soon as possible in 2027.
• prescribe a list of information that landlords must provide to leaseholders on request relating to service charges and management, maintenance, repair, improvement and insurance of their building. Leaseholders will be given the right to request information going back six years, and the government will limit the grounds on which landlords may refuse to provide information. Again, the government notes its plans to commence this measure as soon as possible in 2027.
• require landlords to provide a standardised service charge demand form to PRP tenants who pay both fixed and variable service charges.
• introduce a prescribed schedule that landlords must provide where they demand, or propose to demand, administration charges from leaseholders. The government will require landlords to set out the exact charge or, where an exact charge cannot be included, the method for calculating the charge. Landlords will be required to provide the schedule as part of the annual report and on request from a leaseholder.
• introduce new transparency requirements for building insurance.
• introduce a standardised framework for service charge accounts to improve consistency, transparency and accountability.
• reform the litigation costs regime to ‘address the imbalance between leaseholders and landlords, while maintaining appropriate safeguards’. The response notes that the government will also implement a new right for leaseholders to recover their own litigation costs in specified circumstances.

The response notes that the reforms will be laid in Parliament later this year through a minimum of five complementary statutory instruments. Further detail on the measures is contained in the response, which also notes that for several of the measures the government intends to give landlords notice, so that they have ‘adequate time to make the required adjustments to their processes and systems’.

The consultation also sought views on additional service charge reforms. The government notes it will ‘provide a separate response on these proposals in due course’.