Draft Commonhold and Leasehold Reform Bill

In January 2026 the Government published the Draft Commonhold and Leasehold Reform Bill, confirming its intention to cap ground rents in existing residential leases at £250 per annum, with a longer-term objective of reducing those rents to a peppercorn. Another proposal by the Bill is to ban the creation of new leaseholds and instead to make commonhold the default mode of flat ownership.

The Bill has been published in draft form only and is subject to pre-legislative scrutiny, consultation and amendment. It is important for leaseholders, landlords and managing agents to understand the effects of the proposals and the likely timescale for their implementation.

Good news for shared ownership lessees

Earlier this summer Mark Loveday of Tanfield Chambers was successful in the Court of Appeal on a key point which could affect hundreds of thousands of existing shared ownership lessees and more in the future.

The case of Avon Ground Rents v Canary Gateway concerned the lessees of Canary Gateway and their lengthy attempt to take over the management of their building using the Right to Manage process. They started their claim in 2019 pre covid and several First Tier Tribunal and Upper Tribunal decisions later found themselves in the Court of Appeal on this specific point.

Deferment Rate Challenge

The deferment rate is relevant to residential leaseholders whether they are a house owner seeking their freehold, a flat owner seeking a longer lease of their flat or the freehold to their building acting in concert with other flat owners.