When we last wrote about commonhold reform in February (see that article here), the Draft Commonhold and Leasehold Reform Bill had recently been published and the sector was beginning to digest what it might mean in practice.

Since then, the conversation has moved on.

The Bill has now been through pre-legislative scrutiny by the Housing, Communities and Local Government Committee. The Government has also confirmed, through the King’s Speech, that a Commonhold and Leasehold Reform Bill forms part of its legislative programme for the current parliamentary session.

That does not mean reform has arrived. The draft Bill is not yet law, and there is still a significant amount of parliamentary detail to work through. However, there is now a clearer picture of where the pressure points are, what may change before the final Bill is introduced, and what RMCs, RTM companies, leaseholders, freeholders, developers and managing agents should be watching closely.

A Quick Reminder: What is the Reform Trying to Achieve?

The draft Bill is designed to make commonhold the default tenure for new flats in England and Wales, while improving protections for existing leaseholders.

In broad terms, the proposals include:

• a new and more detailed legal framework for commonhold
• a proposed ban on most new long leasehold flats
• a process to make it easier for existing leasehold blocks to convert to commonhold
• a cap on existing ground rents at £250 per year, reducing to a peppercorn after 40 years
• abolition of leasehold forfeiture, to be replaced with a new court-based enforcement process
• reforms to estate rentcharge enforcement

The principle remains the same: moving away from a system where a third-party freeholder can retain control and income rights, towards a structure where flat owners have a more direct stake in the management and long-term stewardship of their building.

What Has Changed Since February?

The most important development is the Select Committee’s report, published on 27 May 2026.

The Committee welcomed the draft Bill as a significant step towards giving homeowners greater control, but it also made clear that the final Bill needs strengthening if it is to meet leaseholder expectations.

That matters because pre-legislative scrutiny is designed to test draft legislation before it is formally introduced to Parliament. In other words, this is the point at which practical concerns from leaseholders, managing agents, freeholders, lenders, developers and professional bodies are being drawn into the legislative process.

The Committee’s report did not simply say “proceed as drafted”. It identified several areas where the final Bill may need to go further.

Ground Rent: The £250 Cap is Supported, But Timing is Under Pressure

One of the most closely watched parts of the draft Bill is the proposed cap on existing ground rents.

The Government’s current proposal is to cap ground rents at £250 per year for most existing long residential leases, with those rents then reducing to a peppercorn after 40 years.

The Committee supported the principle of the £250 cap, noting that ground rent at this level often affects saleability and mortgageability. However, it questioned why the transition to a peppercorn should take 40 years rather than a shorter period, such as 20 years.

It also pushed for faster implementation. The Government has indicated that the ground rent cap may come into force in late 2028, subject to parliamentary timing and remaining policy decisions. The Committee recommended that the final Bill should bring the cap into force two months after Royal Assent, which could potentially mean late 2027 if the Bill progresses quickly.

For leaseholders, this is one of the areas where reform could have a direct financial effect. For freeholders and investors, it remains one of the most contentious aspects of the proposed legislation.

Commonhold Conversion: Will it be Practical Enough?

The draft Bill proposes to make conversion to commonhold easier by reducing the level of support needed from leaseholders.

At present, converting a leasehold block to commonhold is extremely difficult in practice. The Government’s proposed model would make conversion possible where at least 50% of qualifying leaseholders agree, aligning it more closely with wider enfranchisement processes.

The Committee went further. It recommended that conversion to commonhold should become the default outcome of collective enfranchisement, unless leaseholders actively vote to opt out.

This is an important distinction.

Under the draft Bill as currently framed, leaseholders may still need to go through a two-step process: first acquiring the freehold, then deciding whether to convert to commonhold. The Committee’s concern is that this could add complexity, cost and delay.

For RMCs and RTM companies, this is one of the most practical issues to watch. Many leaseholder-led buildings already operate with a degree of resident control, but commonhold would involve a different legal structure, different governance documents and potentially different responsibilities.

The question is not simply whether conversion should be possible. It is whether the process will be clear, affordable and workable for real buildings with real budgets, mixed levels of engagement and competing resident priorities.

Managing Agents: Regulation is Back in Focus

Perhaps the most significant sector-specific development is the Committee’s strong recommendation on managing agent regulation.

The draft Bill does not currently introduce a full statutory regulator for property managing agents. The Committee described this as a significant shortcoming and recommended that the final Bill should include provisions for a new independent public body regulator with enforcement powers, including the ability to issue fines or revoke licences where agents breach a statutory Code of Practice.

This is highly relevant to the future of commonhold.

Commonhold is often described as homeowner-led management, but that does not mean every commonhold association will self-manage. In larger or more complex buildings, many commonhold associations are likely to appoint professional managing agents to deal with maintenance, compliance, finance, major works, health and safety, communication and day-to-day administration.

That makes competence, transparency and accountability essential.

At Levels, we have long believed that modern block and estate management depends on clear communication, transparent financial information and professional systems. Whether a building is leasehold, share of freehold, RTM-managed or, in future, commonhold, residents and directors need reliable information and properly managed processes. Reforming tenure will not remove the need for competent management. In many cases, it may make it even more important.

Leasehold Will Not Disappear Overnight

One of the clearest messages from recent developments is that leasehold reform will be staged.

The Housing Minister has emphasised that the Government is not proposing to abolish millions of existing leases overnight. The intended direction is to stop the leasehold system renewing itself for future flats, while giving existing leaseholders better routes to control, protection and potential conversion.

That distinction is important.

If the final Bill passes, many existing leaseholders may still live in leasehold properties for some time. Some buildings may not be eligible for conversion. Some may decide conversion is not right for them. Shared ownership and other permitted lease structures may remain in certain circumstances.

For residents, this means expectations need to be managed carefully. The reforms could be very significant, but they are unlikely to provide an instant solution to every leasehold concern.

What Should RMCs, RTM Companies and Leaseholders Do Now?

The first point is not to panic. The law has not yet changed in the way the draft Bill proposes.

However, it would be sensible for directors and leaseholder groups to start thinking ahead. Useful steps include:

• reviewing lease structures and existing management arrangements
• understanding who controls the freehold and how decisions are currently made
• checking the level of leaseholder engagement within the building
• keeping service charge records, budgets and major works planning clear and accessible
• maintaining transparent communication with residents
• taking early professional advice before making any decisions about enfranchisement, RTM or future conversion

For developers, the direction of travel is also clear. New flat schemes are likely to need to be designed with commonhold in mind, even though the final legal framework and implementation timetable remain subject to parliamentary progress.

For managing agents, the message is equally clear. The sector should expect greater scrutiny, higher expectations and, potentially, statutory regulation. Buildings will need agents who can combine technical compliance, financial discipline, resident communication and long-term asset management.

A Reform Agenda Entering its Practical Phase

The February article focused on what the draft Bill proposed. The May update is about whether those proposals are strong enough to work in practice.

The answer, at this stage, is that the Bill is moving forward, but the final shape is still unsettled.

The next major milestone will be the introduction of the final Bill to Parliament. Until then, the key issues to watch are timing, the ground rent transition period, commonhold conversion mechanics, managing agent regulation, and how the Government responds to the Committee’s recommendations.

Commonhold reform is no longer just a theoretical debate about an alternative ownership model. It is becoming a practical question of governance, communication, competence and long-term stewardship.

For leaseholders and resident-led companies, that makes preparation essential. For the property management sector, it is a reminder that the future will belong to agents who can operate transparently, communicate clearly and support communities through increasingly complex legal and operational change.