The 
Housing, Communities and Local Government (HCLG) Committee has called on the government to strengthen its proposed Commonhold and Leasehold Reform Bill, warning that further changes will be needed if ministers are to meet expectations around leasehold reform.
In a report published today, the cross-party committee said the draft legislation represents a significant step towards giving leaseholders greater control over their buildings, but argued the reforms should go further in tackling ground rents, service charges and property management practices.
Among its recommendations, the committee urged the government to strengthen protections against unreasonable fees, improve measures designed to increase homeowner control and establish an independent regulator for property management agents.
Government’s proposed ground rent cap of £250 – bring cap into force by late 2027
The report welcomes the proposed ground rent cap of £250 per year for all existing leaseholders but recommends the government accelerate the timetable to bring in the cap by late 2027.
Proposed transitional period of 40 years to zero ground rent – why not 20 years?
The committee queries the government’s evidence base for the proposed 40-year transitional period to zero ground rent and questions why a shorter transitional period of 20 years would also not represent a fair balance between leaseholders, freeholders and institutional investors.
Housing Committee recommends the regulation of property management agents
The report calls for the regulation of property management agents and states that major firms, like FirstPort, have for too long delivered appalling standards of service without consequence. The committee calls for the government to include provisions for an independent Regulator with the teeth to sanction rogue agents with penalties, including the removal of their licence to operate.
Florence Eshalomi MP, housing committee chair, said: “Millions of leaseholders have been waiting for too long for successive governments to tackle the unfair leasehold system, cap ground rents, and put homeowners in control of the management of their buildings. The government’s draft Bill takes a significant step towards delivering on these objectives but, in our report, we provide a blueprint for how the final bill can meet leaseholders’ expectations and live up to previous government pledges.
“Leaseholders across England and Wales have worked hard to get on the property ladder, yet for far too many the leasehold system has turned the homeownership dream into a living nightmare. A growing number are concerned that, without urgent reform, they will be trapped in homes with rising costs, and ultimately unable to sell.
“It is vital the government now recognises this urgency by bringing forward revised legislation to deliver justice for leaseholders as soon as possible. I urge the government to introduce the final bill in autumn 2026 so this will be the Parliament which finally tackles the longstanding inequities of leasehold.”
Strengthening leaseholders’ rights – enacting the Law Commission’s recommendations
The report expresses concern that several vital recommendations previously made by the Law Commission are entirely missing from the draft bill. The report states these measures, which the government’s manifesto promised to enact, would make it easier and more affordable for existing leaseholders to convert to commonhold. The committee calls for the government to enact the Law Commission’s recommendations, or risk “making commonhold an unattainable escape for homeowners trapped in the leasehold system”.
Making commonhold the default outcome
The report makes a series of recommendations on the technical changes which the government can make to ensure commonhold works as intended in the interests of homeowners. In particular, the report recommends the government should make conversion to commonhold the default outcome of a collective enfranchisement.
Shared ownership and voting rights – the government need to provide urgent clarity
The committee’s inquiry heard concerns from many shared ownership homeowners, who purchased their properties through the affordable housing scheme, that the draft bill is unclear about the voting rights they will have in commonhold associations. The report calls for the government to urgently clarify this and ensure shared owners are not shut out of decisions which directly affect them.
Land Registry must modernise to support the move to commonhold say MPs
The report finds that the failure to modernise HM Land Registry’s legacy systems poses a risk to the successful implementation of commonhold. The report expresses concern that the government may not have supported the organisation with sufficient funding to undertake this work. The report calls for greater digitisation and automation to support the Land Registry to address its backlog of casework and prepare for an increase in commonhold applications.
Dr Kion Ahadi, chief executive of LEASE, the government-funded, independent body, said: “We welcome the publication of the Housing, Communities and Local Government (HCLG) Committee’s report on the draft Commonhold and Leasehold Reform Bill which recognises the scale of change now underway across leasehold and commonhold reform. Any legislative oversight or scrutiny that helps deliver substantial and much-needed change towards a fairer housing system is to be welcomed.
“The draft Bill addresses some of the most damaging features of leasehold, including high and escalating ground rents. More fundamentally, it signals a decisive shift away from leasehold as the default form of home ownership. Moving towards commonhold and making it easier to convert existing buildings where leaseholders choose to do so, has the potential to give homeowners genuine control, security and long-term certainty over their homes.
“We support the Committee’s recommendations aimed at accelerating the pace of change for leaseholders. However, careful and thoughtful implementation will be essential to ensure practical solutions are found for complex issues.
“We also welcome the report’s call for the regulation of property managing agents, including the establishment of an effective independent regulator.
“The proposed commonhold model of collective responsibility represents a new level of involvement and control for homeowners in the governance of their property. Millions of consumers are looking for clarity, confidence and practical support as the system evolves. Ensuring that all existing leaseholders understand how the system works will therefore be vital to the success of this transition.
“We know from supporting thousands of leaseholders every day that providing consumers with clear, accessible guidance will be essential to building confidence in the new system.”
Read the orginal article: https://propertyindustryeye.com/mps-urge-government-to-speed-up-commonhold-and-leasehold-reform/?utm_source=rss&utm_medium=rss&utm_campaign=mps-urge-government-to-speed-up-commonhold-and-leasehold-reform
