So, what are the headlines?
· Reduce the proposed 40 year switch off for ground rent to 20 years
· Introduce the regulation of managing agents
· Make commonhold the mandatory output from enfranchisement
· Implement the remaining Law Commission Recommendations to the extent that these are not incompatible with LAFRA and the CLRB
· Support the Land Registry
So now we have the report (‘the Report’) of the House of Commons Housing Communities and Local Government Committee’s pre-legislative scrutiny of the draft Commonhold and Leasehold Reform Bill.
So, what is the news?
Ground rent switch off
I think the headline point is that the Government wants to accelerate the switch off for ground rents and the report recommends a 20-year timescale rather than 40 years as per the draft legislation. I can see this causing consternation in some circles and in particular given the increase in transfer of value from freeholders to leaseholders this leaves the door open to a Human Rights Act challenge.
Perhaps the point being that in any event whatever is done was likely to be challenged and perhaps the suggestion being now to make it even bolder. The Committee has asked the Government to publish in its response to this Report its evidence as to why it believes that 40 years is the right period.
Make commonhold the mandatory output from enfranchisement
In the Committee’s view the proposed bill does not go far enough to ensure that commonhold becomes the default land tenure for flats. Hence the recommendation that the suggestion that commonhold will be the mandatory output from an enfranchisement. This goes somewhat against the suggestion that if you want to introduce commonhold and make it viable, this might best be done ironing out the main issues in new developments first. A number of commentators have said (myself included) that once it is up and running then conversion can be looked at.
If conversion to commonhold is the mandatory output from enfranchisement, then all of the legacy leasehold issues inside commonhold which flow from adopting Option 1 in the original White Paper will be brought to the fore. There is likely to be a significant lifetime for further discussion around the basis on which non-participants will be able to buy into a collective and the valuation mechanism attaching to this.
There is some suggestion in the report that some commentators and industry bodies might be reluctant to see the end of leasehold. To be clear, this is not the case, the ALEP position remains that it is committed to viable reform and my own personal view is that commonhold can and will become the default tenure but there is going to be some significant time lag for this to happen. The report does at least echo this, and this makes sense in the management of expectation.
The regulation of managing agents
The Report commits to the regulation of managing agents, something which I and a number of other commentators have called for some time. This is perhaps not unsurprising, but it is something that the draft CLRB does not contain. Repeated surveys of leaseholders indicate that poor management is one of the single biggest causes of dissatisfaction and so, addressing this is very welcome. The Report quotes the HCLG survey of homeowners in which 39% said that regulation of managing agents was the action that the Government should choose to protect leaseholders.
Support for the Land Registry
Likewise, the Government recognises the need to resource the Land Registry properly this is welcome news and commonhold is not going to make it out of the starting blocks unless we ensure that the Land Registry has sufficient resource to deal with this new tenure.
The Law Commission’s Recommendations
The Report also recommends that the Law Commission’s remaining recommendations for the reform of the law in this area are added to the draft Bill. These or not in the CLRB as it stands and would be require a lot of new drafting to be included. This would add significantly to the size of the Bill that was the subject of public scrutiny – how the Government will respond to this remains to be seen.
So, what next?
The Government has two months to respond to this Report.
The Committee has urged the Government to place this Bill into the autumn legislative programme with the first and second reading before the November recess; this is with a view to some provisions of the Bill becoming law during 2027. In particular, the £250 cap on ground rent for existing leases is something that they want to see happening within two months of commencement of the new Act rather than by a date set by ministers as the draft Bill currently proposes.
There is clearly quite a lot to digest here and let’s see what happens next, in particular when the Government responds.
Mark Chick
27th May 2026