The Draft Commonhold and Leasehold Reform Bill represents the UK government’s most ambitious and transformative proposal to date in the campaign to modernise leasehold ownership. Although not yet law, this draft bill outlines sweeping changes that could dramatically shift how flats and leasehold houses are owned, extended, and managed.
If you’re a leaseholder, this proposed legislation could affect how much you pay to extend your lease, how long it lasts, and even whether leasehold continues as a system in future.
🏛 What Is the Draft Commonhold and Leasehold Reform Bill?
Introduced in 2023 and refined in 2024, this draft bill builds on earlier legislation including:
- Leasehold Reform Act 1967
- Leasehold Reform, Housing and Urban Development Act 1993
- Commonhold and Leasehold Reform Act 2002
- Leasehold & Freehold Reform Act 2024
- Ground Rent Act 2022
Its goal is to simplify, modernise, and — eventually — replace the leasehold system altogether, starting with more generous lease extension rights and clearer enfranchisement processes.
The bill is currently under review and has not been enacted, but it’s expected to pass in stages over the coming years.
📘 Key Reforms Proposed in the Draft Bill
1. 990-Year Lease Extensions
- All qualifying leaseholders will be entitled to extend their lease by 990 years.
- This will replace the current 90-year extension available under the 1993 Act.
- It applies to flats and leasehold houses.
This change would make lease extensions a one-time action for most owners — giving near-freehold tenure without ongoing renewals.
2. Abolition of Marriage Value
- Currently, leaseholders with under 80 years left must pay 50% of the property’s uplift in value (marriage value).
- The draft bill proposes to abolish marriage value entirely, regardless of lease length.
- This could reduce lease extension premiums by tens of thousands of pounds, particularly in London or on high-value flats.
💬 Note: As of now (2025), marriage value still applies. This proposal is not yet law and subject to court challenges.
3. Standardised Lease Extension Valuation
- Introduction of an online calculator to estimate premiums based on fair valuation formulas.
- Aims to reduce reliance on complex negotiations and expensive tribunal disputes.
This will make the process more predictable, faster, and less adversarial — particularly for lower-value properties.
4. Simplified Collective Enfranchisement
- Leaseholders in qualifying buildings will find it easier to club together and buy the freehold.
- Thresholds for eligibility may be lowered.
- Valuation will be simplified and costs potentially reduced.
- Management rights will be more streamlined post-purchase.
5. Strengthening Commonhold
- Commonhold — introduced in 2002 — will be revived and incentivised.
- The bill proposes:
- Easier conversion of existing leasehold buildings to commonhold
- Legal and financial support for conversions
- Mandatory use of commonhold in certain new developments
This aims to replace leasehold entirely in the long term with a more democratic, owner-controlled system.
🔎 Who Will Benefit Most?
This reform will have the biggest impact on:
- Leaseholders with less than 80 years remaining
- Flat owners facing high or escalating ground rent
- First-time buyers and those purchasing short-lease properties
- Landlords seeking to protect and maximise the value of rental flats
- Leaseholders in older buildings looking to buy their freehold or convert to commonhold
🧠 Frequently Asked Questions
❓ Is the Draft Bill Law Yet?
Not yet. The bill is in draft stage and may take until 2025–2026 or later to become law.
❓ Should I Wait to Extend My Lease?
Not necessarily. If your lease is close to 80 years, waiting could result in paying marriage value — which the law still currently requires.
In many cases, it’s better to:
- Extend now and remove ground rent
- Lock in current premium calculations
- Gain legal protection under existing legislation
You can always convert to commonhold later if laws allow.
❓ Will My Freeholder Be Forced to Sell?
Only in cases of statutory lease extension or enfranchisement. The proposed bill won’t force freeholders to give up buildings — but it will make it easier and cheaper for leaseholders to compel sales through legal means.
⚠️ Risks of Waiting
While the draft bill is promising, it’s not guaranteed — and even if passed, implementation may be phased or regionally delayed. Waiting to act could result in:
- Higher extension premiums
- Losing the ability to remortgage
- A lower sale price if your lease drops under 80 years
💬 Final Thoughts
The Draft Commonhold and Leasehold Reform Bill could reshape the future of flat ownership in England and Wales. If enacted in full, it would:
- Remove hidden charges like ground rent
- Abolish marriage value
- Empower leaseholders with longer, more secure leases
- Promote commonhold as the fairer alternative
But for now, leaseholders still operate under the current legal framework — and strategic action now may still be the smartest move.
📞 Need Help Deciding When to Act?
Our team of RICS-accredited surveyors and leasehold solicitors can help you:
- Understand your current lease value
- Decide whether to extend now or wait
- Prepare for future conversion to commonhold
