Latest seismic announcements from Government - draft Commonhold & Leasehold Reform Bill published and consultation on banning leasehold for new flats commenced

“As I have mentioned before, this represents one of the most significant shifts in the living sector and the wider real estate landscape in a generation.  The implications of the proposed legislation are far‑reaching and will need to be considered across the full lifecycle of development projects - from delivery and funding through to use, occupation and the long‑term enjoyment of new residential and mixed‑use, multi‑tenure schemes.” - Jonathan Corris 

The Government has today (27 January 2026) released a further significant package of leasehold reform measures, including the publication of the long-awaited Draft Commonhold and Leasehold Reform Bill. These measures form a fundamental part of the Government’s wider manifesto objectives of ending the UK’s long‑criticised ‘feudal’ leasehold system.  

The proposed new rules seek to: 

• Re-invigorate and revise the existing commonhold regime, so that it is fit to become the default tenure for new flats
• Ban the use of leasehold in most cases for new flats – an open consultation on moving to commonhold has been included in the suite of new publications
• Abolish forfeiture in favour of a fairer enforcement regime (within commonhold), and measures to make conversion to commonhold more accessible
• Deliver significant reforms for existing leaseholders, including though a cap on ground rents - at £250, changing to a peppercorn cap after 40 years
• Bring forward protections for homeowners who pay estate rent-charges when it comes to enforcement action that can be taken against them (similar to the concept of forfeiture in the freehold context)   

On a technical note, the Bill has been published as a ‘Command Paper’, which allows for pre‑legislative scrutiny and consultation before formal introduction of the draft new legislation to Parliament.

“The pre-legislative scrutiny process is used only for the most important, complex, or potentially controversial draft Bills which highlights the importance of the reforms this Bill contains. We will be following the progress of the draft Bill through this process closely, in particular the provisions relating to the abolition of forfeiture as this will be of vital importance for our clients.” – Mark Foxcroft

The detail and what's next?

The full suite of Government’s published documents is as follows:

• Draft Commonhold & Leasehold Reform Bill: Command Paper 
• Draft Commonhold and Leasehold Reform Bill: Explanatory Notes 
• Guide to the Draft Commonhold and Leasehold Reform Bill
• Draft Commonhold and Leasehold Reform Bill: Delegated Powers Memorandum
• Open Consultation: Moving to commonhold: banning leasehold for new flats
• Addressing unregulated and unaffordable ground rent: policy statement
• Press release: PM: "We're Capping ground rents at £250"

We will publish more detail on each of the key limbs of the proposed new measures shortly.  

In due course, we will provide further detailed analysis pieces about what this all means for you and your organisation, as well as leading on the front foot with round table discussions with our client contacts and stakeholders. 

If you want to discuss anything, now or in the future, please contact Jonathan Corris or Mark Foxcroft.