Big news for homebuyers - the government has just released plans to ban new leaseholds. This means future new-build flats will be sold as commonhold instead. This change could make the jump to homeownership easier for many people.
What does leasehold actually mean?
Let’s start with a quick refresher on the terms:
Freehold (usually houses)
• You own the property AND the land forever
• You handle all repairs
• No lease to worry about
Leasehold (usually flats)
• You own the property for a fixed time period
• Someone else (the freeholder) owns the land and building
• The freeholder handles major repairs
• You pay ground rent and service charges
Commonhold (new route for new-builds)
• You own your property outright
• You get a say in building decisions
• You share responsibility for building management
• No ground rent or lease renewal worries
Read the full article: Leasehold, freehold and commonhold
What leasehold reform means for you
If you're buying:
• More property options to consider
• Clearer understanding of what you own
• Potentially lower long-term costs
If you're selling:
• New selling points for your leasehold property
• Recent reforms make your property more attractive
• Potential buyers will have fewer concerns
Changes brought by last year’s Leasehold Reform
Read: Leasehold Reform in the Conservative Party's 'Wash Up'
This new ban could help buyers find their perfect leasehold home in London’s incredible new-build market. But, of course, there is the matter of existing leasehold property.
Last year, right before the Conservatives left office, they pushed through a number of bills. Leasehold Reform was one of them, which made some strides in the ownership of existing leasehold properties.
The roll out has been a little trickier. The new government have said that some aspects of the bill require further consultations and secondary regulations. So, here’s what has changed and what has yet to change:
Still to come
The biggest issue still to be ironed out is ground rents for existing properties. So far:
• The Leasehold Reform Act 2022 banned ground rents for most new residential property, but that does not apply to leases granted before 30 June 2022.
• To pass the 2024 Leasehold Reform Act quickly, the proposed cap on ground rent for existing property was scrapped.
• This new 2025 Leasehold Ban also wouldn’t address ground rent in existing leases, so there is still room for improvement.
This is a complex bit of legislation to get through, but it would make a property into a more attractive listing, helping a lot of London’s homeowners move more quickly.
Buying and selling leasehold now? We get it done
You don't have to wait on legislation to achieve your goals – the opportunities are already out there. Whether you're buying or selling a leasehold property, our experts can guide you through the process.
If you're selling:
If you're buying:
Source: This article about the Commonhold white paper was reviewed and edited by Foxtons Sales department, ensuring you have the best information on on changes to leasehold legislation when you need it. If you have any questions on this article, ask a Foxtons expert.
