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Commonhold and leasehold reform and the regulation of property managing agents

Commonhold and leasehold reform in England and Wales

Freehold is ownership that lasts forever, and generally gives fairly extensive control of the property. Leasehold provides time-limited ownership (for example, a 99-year lease), and control of the property is shared with, and limited by, the freehold owner.

Leaseholders have long reported a range of problems with the tenure, including: high service and administration charges and a lack of transparency over charges; disproportionate costs to extend leases or buy the freehold; poor practices by managing agents; a slow and costly sales process; and imbalanced dispute mechanisms, with the potential to become liable for the freeholder’s legal costs.

Leasehold and Freehold Reform Act 2024

The Leasehold and Freehold Reform Act (LFRA) 2024 received Royal Assent on 24 May 2024.

The act applies to England and Wales. It implements commitments in the Conservative government’s 2017 housing white paper to “improve consumer choice and fairness in leasehold”. It also takes forward many of the leasehold reform recommendations made by the Law Commission in its reports of 2020.

The LFRA 2024 will strengthen leaseholders’ rights. It will:

• make it cheaper and easier for leaseholders in houses and flats to extend their lease or buy their freehold, including by removing the requirement to pay marriage value.

• increase the standard lease extension term to 990 years, with ground rent reduced to a peppercorn (zero financial value), upon payment of a premium.

• change the qualifying criteria to give more leaseholders the right to extend their lease, buy their freehold and take over management of their building.

• ban the granting of new leasehold houses (with some exceptions).

• improve the transparency of:

• service charges and give leaseholders a new right to request information about service charges and the management of their building.

• administration charges and buildings insurance commissions.

• remove the presumption that leaseholders pay their landlord’s legal costs when challenging poor practice and give them a new right to apply to claim their legal costs from their landlord.

• extend access to redress schemes for leaseholders where the freeholder manages the property directly.

• ensure that relevant property sales information is provided to leaseholders in a timely manner.

The government is implementing the LFRA through an extensive programme of secondary legislation, with consultations where necessary. The Commons Library briefing on Leasehold reform in England and Wales: What’s happening and when? provides further information.

Commonhold and Leasehold Reform Bill 2026-27

The Labour Party manifesto 2024 (PDF) committed to “bring the feudal leasehold system to an end”. To this end, the King’s Speech 2026 announced that the government will bring forward a Commonhold and Leasehold Reform Bill in the 2026-27 parliamentary session.

The bill, which would apply to England and Wales, would:

• create a new legal framework for the commonhold tenure. Commonhold was introduced through the Commonhold and Leasehold Reform Act 2002 as a way of enabling the freehold ownership of flats and avoiding the shortcomings of leasehold ownership. However, it has failed to be used as a widespread form of homeownership. In 2020, the Law Commission published a report on reinvigorating commonhold. The government published a commonhold white paper on 3 March 2025, setting out its proposals for reforming and reinvigorating commonhold.

• ban the use of leasehold for most new flats to make commonhold the default tenure. The government has consulted on its proposals, including the scope and timing of the ban and any exemptions. The consultation closed on 24 April 2026 and the government is analysing the feedback.

• cap ground rents at £250 a year, falling to a peppercorn after 40 years, with the cap likely to come into force in late 2028, subject to parliamentary approval.

• abolish the threat of forfeiture, replacing it with a fairer and more proportionate lease enforcement scheme.

• repeal the disproportionate enforcement powers (under the Law of Property Act 1925) that apply to estate rentcharges on private freehold estates and require rentcharge owners to provide notice before commencement of enforcement action for estate rentcharge arrears.

• create a new right for leaseholders in flats to request improvements, such as a gigabit capable broadband connection. The government has consulted on legislative proposals to address broadband rollout in leasehold flats. The consultation closed on 16 February 2026 and the government is analysing the feedback.

A draft version of the Commonhold and Leasehold Reform Bill, which was published on 27 January 2026, has been subject to pre-legislative scrutiny by the Housing, Communities and Local Government Select Committee. The committee’s pre-legislative scrutiny report, published on 27 May 2026, found that the government’s draft bill is a significant step towards giving leaseholders greater control of their buildings, but concluded that the government “must go further and faster” on commonhold and leasehold reform.

In particular, the committee recommended that the government should:

• introduce the final bill in autumn 2026.

• commence the £250 ground rent cap in late 2027 and consider whether ground rents should fall to a peppercorn within a shorter transitional period, such as 20 years.

• create an independent regulator for property management agents, with powers to sanction rogue agents.

• make technical changes to the bill to ensure commonhold works as intended, including by making conversion to commonhold the default outcome of a collective enfranchisement.

• enact the remaining Law Commission recommendations on leasehold enfranchisement and the right to manage.

The government will consider the committee’s report before introducing the final version of the bill to Parliament.

The regulation of property managing agents in England

Property managing agents play a vital role in the housing market. They are often contracted to manage and maintain multi-occupancy buildings and residential estates. They can deliver a number of functions on behalf of their client, including maintenance and repairs, resident liaison, financial responsibilities, arranging and managing contracts, and ensuring compliance with statutory obligations. The cost of these works is usually recoverable from leaseholders via an obligation set out in their lease agreements to pay a service charge.

There is currently no overarching statutory regulation of property managing agents, although they are subject to consumer protection law. Since 1 October 2014, managing agents of leasehold homes have had to belong to one of the government-approved redress schemes: The Property Ombudsman or The Property Redress Scheme. The redress schemes enable leaseholders and freeholders dealing with property managing agents to complain to an independent body about the service they have received. Local authorities are responsible for enforcing membership compliance. The government has published guidance on the requirement to belong to a redress scheme (August 2018).

There is currently a gap in access to redress for leaseholders where their freeholder does not employ a managing agent (and is not a social landlord) but carries out their own property management. Once in force, part 6 of the Leasehold and Freehold Reform Act 2024 will require freeholders who directly manage their building or estate to belong to a redress scheme.

Some managing agents belong to a professional or trade body, for example, The Property Institute. These bodies offer training and guidance, and often require members to adhere to a code of practice. Membership is voluntary and many agents do not belong to a professional or trade body.

Regulation of Property Agents Working Group - 2018

In 2018, the Conservative government established a Regulation of Property Agents Working Group (RPAWG) chaired by Lord Best. The government had committed to regulate the whole property agent sector (covering estate, letting and managing agents) and asked the group to develop a new regulatory model.

The group reported in 2019 and included recommendations for:

• a model for an independent property-agent regulator, including how it would operate and how it would enforce compliance

• a single, mandatory and legally-enforceable code of practice for property agents

• a system of minimum entry requirements and continuing professional development for property agents

• clarifying processes and charges for leaseholders

The Conservative government said it would consider the report’s recommendations, but did not respond before the 2024 general election.

Mandatory professional qualifications for managing agents

In a written ministerial statement on 21 November 2024, the Housing Minister, Matthew Pennycook, confirmed the government would “strengthen regulation of managing agents to drive up the standard of their service”. 

On 4 July 2025, the government launched a consultation on Strengthening leaseholder protections over charges and services. Section 4 of the consultation set out proposals to introduce mandatory professional qualifications for managing agents of leasehold, commonhold, and share of freehold properties and estate managers of freehold estates. (Note: the proposals did not relate to estate agents or letting agents). The government’s “preferred option” is for mandatory professional qualifications to be overseen by designated professional bodies (such as The Property Institute), supported by local authority enforcement. The consultation also sought views on whether a similar approach should be taken in Wales. The consultation closed on 26 September 2025 and the government is currently analysing the consultation feedback.

The Housing Minister has been clear that this is “not the final step in the regulation of managing agents”. The government will continue to reflect on the other recommendations made in the RPAWG 2019 report and will set out its full position on the regulation of property managing agents “in due course”. (PQ 85213, 4 November 2025)

Housing, Communities and Local Government (HCLG) Committee

During the 2024–26 parliamentary session, the HCLG Committee held two non-inquiry evidence sessions to examine issues that homeowners have raised about property management companies, and to consider the level of regulation the industry should face. It also heard evidence about property managing agents during its pre-legislative scrutiny of the draft Commonhold and Leasehold Reform Bill.

The committee’s pre-legislative scrutiny report, published on 27 May 2026, highlighted long-standing concerns about the performance of property managing agents across the country, including:

• unreasonable service charge and fee increases

• failures to carry out necessary works within a reasonable timeline

• a lack of transparency around how service charges are spent

• poor engagement and communication with residents when they raised complaints

• agents operating in the interests of freeholders as their clients, rather than in the interests of the leaseholders who pay the building’s service charges

The committee said it was a “significant shortcoming” that the draft bill did not include provisions to regulate property managing agents and recommended:

The final bill must include provisions to establish a new, independent public body as the Regulator for property managing agents, with enforcement powers. This must include powers for the Regulator to issue fines or revoke licences of managing agents who breach a statutory Code of Practice, in line with the recommendations of Lord Best’s report on the Regulation of Property Agents.

The government should not pursue its current preferred option of mandatory qualifications being implemented by designated professional bodies, such as The Property Institute, as leaseholders are clear that they do not have confidence in industry bodies to carry out this duty impartially. (paras 117 & 118)

The government will consider the committee’s report before introducing the final version of the bill to Parliament.

The Commons Library briefing on The regulation of letting and managing agents (England) (last updated May 2023) provides background information.

Further information

UK Parliament

Commons Library, Leasehold reform in England and Wales: What’s happening and when?, 23 June 2026

Housing, Communities and Local Government (HCLG) Committee, Pre-legislative scrutiny of the draft Commonhold and Leasehold Reform Bill, 27 May 2026

HCLG Committee, The Government must go further and faster on commonhold and leasehold reform, says Housing Committee, 27 May 2026

Commons Library, The ground rents cap, 29 January 2026

Written statement (HCWS1278) by the Housing Minister on Commonhold and Leasehold Reform, 27 January 2026

Commons Library, Leasehold housing in England: Statistics, 25 July 2025

HCLG Committee, Housing Committee presses property management companies on fees, complaint handling, and services, 2 July 2025

HoC debate on Leasehold reform on 3 June 2025

Written statement (HCWS1278) by the Housing Minister on Leasehold and Commonhold Reform, 21 November 2024

Commons Library briefing: Leasehold and Freehold Reform Bill 2023-24: Progress of the Bill, February 2024

Commons Library briefing: Leasehold and Freehold Reform Bill 2023-24, December 2023

Commons Library briefing: Leasehold and Commonhold Reform, September 2023

Other

Ministry of Housing, Communities and Local Government (MHCLG), Leasehold toolkit – England, 20 May 2026

MHCLG, Housing Minister speech on leasehold and commonhold reform, 29 April 2026

Leasehold Advisory Service (LEASE), Insight report: Redress, 19 February 2026

LEASE, Leasehold reforms explained, 28 January 2026

MHCLG, PM: “We’re capping ground rents at £250”, 27 January 2026

Senedd Research, Service charges: what’s changing for leaseholders in Wales?, December 2025

Press

Propertymark, Leasehold concerns widen gap between house and flat prices, 29 June 2026

The Guardian, ‘The developers got greedy’: the women who took on the leasehold scandal – and won, 16 June 2026

Inside Housing, London landlords warn uncertainty and regulatory risk in draft commonhold bill could reduce new housing supply, 6 May 2026 (subscription required)

Leasehold Knowledge Partnership, Court of Appeal gives freeholders the go-ahead for round two of judicial review, 30 April 2026

BBC, We can't abolish leasehold outright, minister says, 29 April 2026

Red Brick, Why managing agents must finally be regulated, Danny Beales MP, 22 April 2026

Leasehold knowledge Partnership, Six arguments of freeholders in search of an economic justification (and failing to find one), Dr Alexander Hamilton, 13 April 2026

Inside Housing, Commonhold is coming, but will it drive standards up for managing agents?, Andrew Bulmer, Chief Executive of The Property Institute, 2 April 2026 (subscription required)

The Times, Leasehold reforms won’t solve all the issues faced by flat-owners, David Wadsworth, 4 March 2026 (subscription required)

BBC, Go further on regulating leasehold managing agents, Angela Rayner urges, 3 March 2026

LandlordZONE, Leasehold Reform in England & Wales - who are the winners and losers?, 7 February 2026

Residential Freehold Association, Capping ground rents is no way to help leaseholders, 4 February 2026

Red Brick, Labour’s Commonhold Bill is the start of the end of the leasehold nightmare, 3 February 2026

The Times, Landlords say cap on ground rents could affect fire safety, 28 January 2026 (subscription required)

Pensions Age, Proposed leasehold reforms could have ‘major implications’ for pension funds, 27 January 2026

Residential Freehold Association, RFA response to draft Leasehold and Commonhold Reform Bill, 27 January 2026