The Government has reaffirmed its commitment to overhaul the leasehold system in England and Wales, alongside introducing regulatory measures for the property sector. These announcements have been warmly welcomed by Propertymark, a leading professional body for estate agents, which views the planned reforms as a significant step forward for consumers and the industry.
Timeline for leasehold and commonhold reform
On 21 November 2024, the Minister of State for Housing and Planning, Matthew Pennycook, outlined the government’s roadmap for reforming leasehold and commonhold systems. The reforms, designed to address long-standing issues in property ownership, will roll out in phases throughout 2025.
Among the key changes, the government plans to:
- January 2025: Remove the two-year restriction on enfranchisement and lease extension claims, allowing leaseholders to act immediately after purchasing a property.
Spring 2025: Introduce provisions to improve the Right to Manage, increasing access for leaseholders in mixed-use buildings and reforming associated costs and voting rights.
Summer 2025: Consult on valuation rates to simplify and potentially reduce enfranchisement premiums for leaseholders.
The government also intends to implement consumer protection measures for homeowners on freehold estates, including tackling excessive estate management fees, sometimes called “fleece holding.”
Looking further ahead, the Leasehold and Commonhold Reform Bill is expected to be published in draft form in late 2025. This legislation will address unregulated ground rents, remove the threat of forfeiture for non-compliance with lease terms, and outline the transition away from leasehold towards a commonhold system.
Renewed focus on professionalising the property sector
In addition to leasehold reforms, Pennycook committed to revisiting Lord Best’s 2019 Regulation of Property Agents report, which proposed compulsory qualifications for property agents and a regulatory framework to improve industry standards.
This aligns with Propertymark’s long-standing campaign to professionalise the sector. Timothy Douglas, Head of Policy and Campaigns at Propertymark, welcomed the announcement:
“Propertymark welcomes further reforms to leasehold to strengthen protections for consumers and make it easier for people to buy, sell and rent homes. It is encouraging that the Minister is looking again at Lord Best’s report and understands the value of qualifications for agents and professionalising the property sector. We look forward to continuing to work with the UK Government to ensure these requirements are extended as widely as possible.”
Leasehold awareness growing among buyers
Propertymark’s recent report, Leasehold and Freehold Reform: what has changed?, reveals increasing awareness among homebuyers about the complexities of leasehold ownership. The study found that 72% of estate agents observed greater buyer understanding of leasehold issues compared to five years ago, with 60% of buyers asking for leasehold details before viewing a property.
Despite this growing awareness, opinions remain divided on abolishing the leasehold system altogether. While many support measures like restricting ground rents, only 42% of Propertymark members were unequivocally in favour of moving to a commonhold system.
The report suggested appointing block managers to address commonhold challenges such as dispute resolution and maintenance contributions, offering a practical solution for transitioning away from leasehold.
Balancing reform with practical challenges
While Propertymark and other stakeholders have praised the government’s ambitious plans, challenges remain in implementing these reforms effectively. The move towards a commonhold system, for example, requires careful planning to avoid unintended consequences for property owners and developers.
As the consultation progresses and draft legislation is introduced, all eyes will be on how these changes impact the housing market and whether they deliver on their promise to make property ownership more equitable and transparent.
For now, the government’s renewed focus on leasehold and property sector reform signals a long-overdue shift towards greater consumer protection and professionalisation in an industry often criticised for its lack of regulation.
