The government has launched a wide-ranging consultation as part of its ongoing leasehold reforms, aiming to simplify ownership, improve transparency, and eventually replace leasehold with commonhold. Letting agents, landlords and managing agents will need to pay close attention as changes begin to gather pace. Announced in the King’s Speech, the Leasehold and Commonhold Reform Bill marks a major step towards ending what ministers call the “feudal” leasehold system. But while proposals are ambitious, much of the legislation will be shaped by consultation — and the implications for the residential property sector could be significant…

Transparency over service charges

A central focus of the reforms is to tackle opaque and often unregulated service charges — a frequent source of frustration for leaseholders. The Department for Levelling Up, Housing and Communities (DLUHC) is now seeking views on new standardised service charge documents, including itemised annual accounts and demand forms.

The aim is to provide leaseholders with consistent, easy-to-understand breakdowns of what they are paying for, and why. Landlords and managing agents would be required to follow the new format — making administration more uniform and, crucially, more accountable.

The consultation closes on 26 September 2025, and property professionals are being urged to submit their responses to help shape the final reforms.

A shift to commonhold: replacing leasehold for good?

Another major element of the leasehold reforms is the push to reintroduce and expand commonhold — a tenure that gives flat owners outright ownership of their property and shared responsibility for communal areas.

Under this model, homeowners become members of a commonhold association, which governs the block democratically. There are no leases, no ground rents, and no third-party landlords. Instead, residents have a direct say in budgeting, maintenance and long-term planning.

First introduced in 2002, commonhold never gained traction due to a lack of lender support and legal complexity. But the Law Commission and housing campaigners have continued to advocate for its return. A white paper published in March 2025 outlines how the government intends to overcome past barriers and make commonhold the new default for flats — replacing leasehold entirely.

Scott Goldstein, partner at Payne Hicks Beach, warns that preparation is key:

“The challenge is ensuring lenders, agents and owners are ready for the transition. Financial systems and education resources will be essential for the success of commonhold.”

What it means for existing leaseholders

While banning new leasehold flats is a welcome future safeguard, existing leaseholders — around 5 million in the UK — are still navigating complex and costly ownership structures.

Recent rule changes have removed the two-year ownership requirement before lease extension, and leaseholders are no longer obliged to pay the freeholder’s legal fees when launching a right-to-manage claim. But many reforms remain pending, including changes to the valuation of lease extensions and long-promised caps on ground rents.

Katie Kendrick, founder of the National Leasehold Campaign, argues more urgent action is needed:

“These leasehold reforms must support current homeowners too. Without fair routes to convert to commonhold or tackle ground rent abuse, millions will remain stuck in a broken system.”

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