Housing reform has been placed firmly at the centre of the government’s legislative agenda after King Charles used the King’s Speech to unveil a series of housing-related bills for the year ahead.
Delivering the speech in the House of Lords, the King set out plans for 37 new bills in the next parliamentary session, with leasehold reform, social housing and building safety among the most significant measures affecting the property sector.
One of the headline proposals is a new Commonhold and Leasehold Reform Bill, which would ban the sale of new leasehold flats in England and Wales and introduce a cap on ground rents at £250 per year.
The move represents the latest stage in the long-running overhaul of the leasehold system and is likely to have major implications for developers, freeholders, managing agents and lenders. Ministers argue the changes are designed to simplify property ownership structures and reduce ongoing costs for leaseholders.
The government also plans to introduce a Social Housing Renewal Bill aimed at increasing protections for social tenants and preserving newly built affordable housing stock.
Under the proposals, newly constructed social homes in England would be exempt from the Right to Buy scheme for 35 years in an effort to prevent the rapid loss of affordable homes. The bill would also introduce additional protections for victims of domestic abuse living in social housing, allowing them to remain in their homes in certain circumstances.
Building safety remains another key area of focus. A separate Remediation Bill will hand ministers new powers to require construction product manufacturers to contribute towards the cost of removing unsafe cladding from residential buildings.
The legislation forms part of the government’s wider response to the building safety crisis, with pressure continuing on developers, manufacturers and freeholders over remediation costs and delays to works.
The King’s Speech signals another busy legislative period for the housing sector, with agents, landlords, developers, housing associations and property professionals now awaiting further detail on how the measures will be implemented in practice.
Industry reaction:
Timothy Douglas, head of policy and campaigns at Propertymark: “Propertymark welcomes the UK Government’s continued focus on leasehold reform as we support action to address longstanding issues within the leasehold system, including excessive ground rents, unfair charges and greater transparency for consumers. We now need to see these reforms progress at pace, with clear timelines and delivery, to provide certainty and confidence for consumers and the wider housing sector.
“We acknowledge the UK Government’s ambition to make commonhold the default tenure for new flats and to strengthen leaseholder rights. However, reform must be carefully phased to avoid market disruption and ensure existing leaseholders, property agents, and developers can transition effectively to any new system. Propertymark has consistently called for clearer standards, improved transparency around service charges, professional qualifications for property agents, and practical reforms that improve consumer confidence across the housing market.
“It is positive to see plans to accelerate remediation works and strengthen accountability for unsafe buildings. Leaseholders and residents have faced unacceptable delays and uncertainty for too long. The UK Government must ensure remediation funding, enforcement powers and clear legal responsibilities are implemented quickly so that affected residents are protected, and confidence can return to the housing market.
“Reforms to the housing sector can support economic growth and allow people to get on in life, but there must also be a much stronger focus on reducing and removing property taxation to make it quicker, easier and more affordable for people to move and get onto the housing ladder, while also helping to reduce cost pressures on landlords, which in turn brings down the cost of renting for tenants. Propertymark will continue to engage with policy makers and the UK Government to ensure the housing market works for all.”
A spokesperson for the Residential Freehold Association: “The government’s announcement in the King’s Speech that it intends to bring forward legislation to reform the leasehold system and cap existing ground rents represents a wholly unjustified interference with existing property rights which, if enacted, would seriously damage investor confidence in the UK housing market and send a dangerous and unprecedented signal to the wider institutional investment sector.
“These proposals would transfer significant value from pension funds and other long-term investors to wealthy overseas buy-to-let landlords who make up a significant proportion of leaseholders in the UK. The previous Government’s own impact assessment suggested a retrospective cap could cost around £30bn, while the resulting forced exit of professional freeholders from the sector risks hindering building safety projects without addressing rising service charges.
“We urge the government to instead prioritise reforms that would deliver meaningful real-world benefits for leaseholders, including regulating managing agents, improving transparency and raising professional standards across the sector.”
Andrew Bulmer, chief executive officer of The Property Institute: “The [Commonhold and Leasehold Reform] Bill represents a once in a generation opportunity to change the way we own and manage flats in England and Wales. Commonhold and a reformed leasehold will bring greater self-governance to flat owners, who will enjoy new rights but also take on new legal responsibilities, including building safety, company administration and financial governance.
“While we welcome the Bill in principle, we are keen to ensure there are measures that move towards mandatory qualifications for property managers as a minimum, and whilst we understand the Government will want to respond to the consultation exercise and Select Committee, we hope it will declare its intentions soon, so that the sector has some certainty. It is vital that empowered commonholders and leaseholders are supported by competent, qualified professional property managers.
“Greater resident empowerment and independence is a worthy ambition but it must not get ahead of protecting those owners from an unregulated sector, managing people’s safety in their homes and millions of pounds in their greatest assets, yet with zero bar to entry. But, with the right safeguards in place, we know it can work. A co-proprietor tenure operates in most other countries around the world, including Scotland. However, with two-thirds of the buildings managed by our members are already homeowner-run through resident management companies, it is vital that they have access to professional and competent support.
“So, as more homeowners collectively choose their managing agents, there must be stronger regulatory oversight to raise standards. The government must go further than mandating qualifications and introduce regulation of property managers to secure better outcomes for residents and restore confidence in flat ownership.”
Linz Darlington, managing director of Homehold: “The Labour government has today announced that it will be introducing the Commonhold and Leasehold Reform Bill. This ambitious legislation is expected to ban the sale of new leasehold flats, make Commonhold the default tenure and cap ground rent for existing leaseholders.
“Once implemented, there is little doubt that these changes will benefit leaseholders. However, Labour should not be surprised if this legislative promise is not received with unconditional enthusiasm.
“For many, this Bill will feel like déjà vu. We saw a similarly extensive piece of legislation announced by the previous Conservative Government in the King’s Speech in 2023. While their Leasehold and Freehold Reform Act 2024 was eventually passed during the ‘wash-up’ period at the end of the last Parliament, the core provisions intended to make it ‘cheaper and easier’ to extend leases and buy freeholds have still not been put into effect.
“In a keynote speech to the Institute for Government in April, Matthew Pennycook confirmed that the 2024 Act is being delayed due to a ‘small number of flaws’ that should be rectified in this new Bill. He neglected to say exactly what these were, or why they couldn’t have been resolved more promptly in other recent housing legislation, such as the Renters’ Rights Act.
“We are now approximately halfway through the current Parliament. There is no guarantee that such an extensive and contentious Bill will be both passed and fully implemented before the next general election.
“Leaseholders with short leases and high ground rents are suffering; in many cases they are stuck in flats they cannot mortgage or sell.
“Any leaseholder waiting for meaningful change may be forced to wait for this new Bill to run its course. This could be at the end of this Parliament, but could easily slip well into the next. At this point we may have a very different Government.
“Implementing the 2024 Act is an urgent repair to the shaky foundations of the existing system. This new Bill is a luxury extension distracting from the job at hand.”
Scott Goldstein, property disputes partner at Payne Hicks Beach: “The reform of the leasehold system is set to shake up the housing sector. Developers will no longer be able to hold onto freeholds once construction finishes, tightening their ground rent income, which is already reduced with the upcoming cap in 2028.
“The further loss of earnings from lease extensions could prompt developers to recoup costs by upping the price of new build flats. Developers may also turn their attention towards projects not affected by the leasehold restrictions, such as Build to Rent schemes or social housing.
“Buyers may soon find themselves footing more of the bill as the industry adapts to these sweeping reforms.”
Sim Sekhon, Group CEO at LegalforLandlords: “Leasehold reform may benefit homeowners, but the government’s real challenge is delivering fairer protections without undermining investment confidence or triggering wider financial consequences across the housing market.
“Any further reform of the leasehold system is likely to be welcomed by leaseholders, but there is also a real risk of unintended financial consequences for landlords, freeholders and even pension funds exposed to ground rent investments.
“Measures such as capping ground rents and reducing enfranchisement premiums could significantly impact long-term asset values and income streams, particularly for landlords who have structured investments around existing lease agreements. In some cases, freeholders could effectively face a double financial hit through both reduced rental income and lower enfranchisement values.
“The key challenge for the government will be striking a fair balance between improving protections for leaseholders while avoiding reforms that create market instability, discourage investment or inadvertently impact consumers through weaker pension fund performance and reduced housing sector confidence.”
James Morris, partner, Mayer Brown: “While it’s encouraging to see attention focused on accelerating the remediation programme and manufacturers’ liability, it is unclear how the Bill will achieve those aims. The causes of cladding crisis and the delays to remediation are multi-faceted in many instances and legislation alone is unlikely to be sufficient.
“The government must also grapple with the practical issues that have been responsible (at least in part) for delays in remediation up to this point. These include inconsistent approaches to remediation, a lack of market capacity and delays caused by the Building Safety Regulator. Without more clarity on the specific mechanisms which will be included in the Bill, it is difficult to assess how successful the further legislation will be in achieving the noble aims to increase pace and accountability.”
Paul Rickard, chief executive, Pocket Living: “From a housing supply perspective, there are positive measures within this King’s Speech that will help to deliver new homes, such as speeding up grid connections. The recognition of the importance of housing in any successful industrial or defence strategy is also to be welcomed. We look forward to continuing to work with government to identify and implement the bold reforms that are needed to unlock housing, delayer the viability challenges, and progress with fiscal devolution to help support local and regional housebuilding and regeneration.”
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