Law Society backs government proposal to ban leasehold for new flats

Law Society welcomes government reforms to modernise residential property law and ensure fairer housing tenure

The Law Society of England and Wales has welcomed a government proposal to ban the use of leasehold for new flats as a significant advance in the reform of commonhold tenure, underscoring the critical need to modernise residential property law in England and Wales.

The proposals form part of the Draft Commonhold and Leasehold Reform Bill, which includes government plans to halt the creation of new leasehold interests for flats and to promote commonhold as the default form of tenure for new developments. This represents a pivotal step in addressing long‑standing concerns about the leasehold system, which critics say separates control of a building from the interests of those who live in it.

Mark Evans, President of the Law Society of England and Wales, described the draft bill and related government consultation as “a significant step towards introducing commonhold as the default tenure for new flats.” He emphasised the importance of minimising exemptions to the proposed leasehold ban, warning that excessive carve‑outs could undermine the reform’s objectives and allow continued exploitation of leasehold arrangements.

The Law Society has also highlighted the need for the property and conveyancing sector to prepare for these reforms, noting that several elements of the market including HM Land Registry operations and mortgage lending systems will require updates to support a transition to commonhold. The Society has recommended a staggered implementation approach, initially focussing on wholly residential new blocks before considering more complex mixed‑use developments, in order to foster market confidence and allow the profession time to adapt.

Commonhold, as a tenure, allows individual owners to hold the freehold of their units indefinitely and jointly own and manage the common areas of a building through a commonhold association. It contrasts with leasehold, where ownership is limited by term and subject to obligations to a freeholder — a system critics say has entrenched rights imbalances and value erosion for leaseholders.

Supporters of the reform argue that making commonhold the default tenure for new flats could correct structural problems in the property market, giving occupiers greater control and removing the depreciation inherent in leasehold ownership. The Law Society’s endorsement comes amid wider government efforts to overhaul the residential property system and ensure a fairer, more transparent legal framework for homeowners.

However, legal and industry stakeholders have cautioned that the success of commonhold reform will depend on careful and realistic alignment with existing market conditions, including the lending environment and conveyancing practices, to ensure that the new system is workable and widely adopted.