Residential leasehold and commonhold

All three residential leasehold and commonhold reports were published on 21 July 2020. Further details are available on the project-specific pages by following the above links.

Summary: The future of home ownership: download our summary of all three residential leasehold and commonhold reports and how they fit with Government’s own reforms.

At a glance: the future of home ownership: download our short “at a glance” summary of the future of home ownership.

In more detail: the future of home ownership: download our introductory chapter to all three reports, which explains how our reports fit with Government’s own reforms, and sets out the future of home ownership after reform.

The problem

In England and Wales, properties can either be owned as freehold or as leasehold. Leasehold is a form of ownership where a person owns a property for a set number of years (typically, 99 or 125 years) on a lease from a landlord, who owns the freehold.

Flats are almost always owned on a leasehold basis, but in recent years it has also increasingly been used for newly built houses.

It is estimated that there are over 4 million leasehold homes in England alone. However, we have been told that the law which applies to leasehold is far from satisfactory.

The UK Government has said that leasehold has “far too many problems including disproportionate costs to extend leases; poor value property management; and a slow and costly sales process”. The Welsh Government has also noted “widespread criticism of poor practice in the use of leasehold”.

Respondents to the consultation on our 13^th Programme of Law Reform also identified numerous problems with residential leasehold law.

We were tasked with improving consumer choice, and with providing greater fairness and transparency for leaseholders.

The project

Our project currently addresses three issues:

• leasehold enfranchisement
• the right to manage
• commonhold, which provides an alternative form of ownership to residential leasehold.

The Terms of Reference, agreed with the Ministry for Housing, Communities and Local Government and with the Welsh Government, are available here.

Our project complements the ongoing work of the Ministry of Housing, Communities and Local Government and the Welsh Government. That work is summarised in “The future of home ownership” documents above.

Leasehold enfranchisement

Our report, Leasehold home ownership: buying your freehold or extending your lease, was published on 21 July 2020. We published our report on valuation, Report on options to reduce the price payable, on 9 January 2020.

Our consultation paper on leasehold enfranchisement reform was published in September 2018. The consultation period closed on 7 January 2019.

Ahead of a full response to our July 2020 Report, Government has announced that it has accepted some of the recommendations that we made in it. Government has also announced which of the options to reduce the price payable on enfranchisement contained in our January 2020 Report it intends to take forward.

To read about Government’s announcement, the reports, the consultation paper, or other documents related to this project, please see the leasehold enfranchisement project page.

Right to Manage

Our report, Leasehold home ownership: exercising the right to manage, was published on 21 July 2020.

Our consultation paper on the right to manage was published in January 2019. The consultation period closed on 30 April 2019.

To read the report, the consultation paper, or other documents related to this project, please see the right to manage project page.

Commonhold

Our report, Reinvigorating commonhold: the alternative to leasehold ownership, was published on 21 July 2020.

Our consultation paper on commonhold was published in December 2018. The consultation period closed on 10 March 2019

To read the report, the consultation paper, or other documents related to this project, please see the commonhold project page.

Contact

By email to:   propertyandtrust@lawcommission.gov.uk