Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

MPs Urge Faster Leasehold and Commonhold Reform to Protect Leaseholders

A new report from the Housing, Communities and Local Government (HCLG) Committee has called on the UK government to accelerate its reforms to leasehold and commonhold property law. The committee described the government’s draft Commonhold and Leasehold Reform Bill as a significant step, but said more action is needed to give leaseholders greater control and protections.

The committee recommended that the proposed ground rent cap of £250 should be implemented by the end of next year, and questioned why the transition to zero ground rent is set at 40 years instead of 20. The report suggested that a shorter transition could still balance the interests of leaseholders, freeholders, and investors.

The committee also called for independent regulation of property management agents, citing longstanding concerns about poor service standards. It noted that recommendations from the Law Commission to strengthen leaseholders’ rights had not been included in the draft bill, despite previous government commitments.

On commonhold tenure, the report highlighted that only 18 commonhold blocks exist in England and Wales since the legal framework was introduced in 2002. The committee recommended making conversion to commonhold the default outcome of collective enfranchisement and called for more detailed guidance for developers as leasehold is phased out for new flats.

The report noted that some lenders already offer mortgages for commonhold properties, and that more products could become available as lender systems and staff training improve. However, it was estimated that it could take at least two years to train estate agents, valuers, surveyors, and conveyancers on the commonhold system.

The committee expressed concern about the Land Registry’s ability to support the reforms, warning that outdated systems and lack of funding could hinder the implementation of commonhold. It called for greater digitisation and automation to address backlogs and prepare for increased commonhold applications.

For shared ownership homeowners, the committee said urgent clarity is needed on their voting rights in commonhold associations. The draft bill currently proposes that shared ownership providers have some control over decisions during the initial repair period, but the committee recommended that shared owners and providers share the vote. If not, the final bill should at least allow shared owners to attend association meetings.