Now is the time to have your say on the future of leasehold

Recent law reform proposals, as part of the Leasehold and Freehold Reform Act 2024, have the potential to transform how we develop and manage blocks of leasehold flats.  

Now, the government is consulting on how these reforms will be implemented. This is your opportunity to understand what is being proposed and how it will affect your organisation and residents and respond to the government’s consultation. 

Leasehold and housing associations 

Since law reforms in the 1920s, leasehold has been the default tenure for conveying ownership rights and responsibilities for flats. Leasehold remains the most common way that properties in a multi-occupancy building can be sub-divided and sold in England and Wales. 

The proportion of leasehold flats in most housing association portfolios has increased in recent decades, through schemes such as Right to Buy, Shared Ownership and open-market sales. Many of our organisations have transformed as we have grown and adapted our service delivery models to accommodate the additional compliance requirements that accompany leasehold management. 

What leasehold law reform is taking place? 

The government is considering a range of proposals that could transform how blocks of leasehold flats are managed. The aim of these proposals is laudable, as the intention is to improve protections for leaseholders whilst further empowering them and increasing transparency. This aligns with values that are held in high regard across the housing sector. 

Being aware of the law of unintended consequences, the government has launched a consultation on strengthening leaseholder protections over charges and services. This provides all stakeholders, including housing associations, an opportunity to respond to the proposals to implement aspects of Part 4 of the Leasehold and Freehold Reform Act 2024. 

It is also worth noting that the latest reform proposals are not being considered in isolation. On 3 March 2025 the government published its White Paper: “The proposed new commonhold model for homeownership in England and Wales.” This proposes to ban the sale of leasehold flats from 2029 and for commonhold to become the default tenure.  

There are also other changes in motion or being considered. All combined, these have the potential to strip out financial incentives for being a landlord of blocks of leasehold flats, and to replace them with additional layers of operational complexity and risk.   

What does the consultation propose? 

The proposals are varied, and include: 

• The introduction of a new annual report for blocks of leasehold flats. 
• The right for leaseholders to access additional information. 
• Financial penalties on landlords of up to £5,000 for certain instances of compliance failure (per leaseholder). 
• Mandatory reserve funds. 
• An overhaul of the litigation cost/risk profile so that it weighs more in favour of leaseholders.
• Consultation on reform of section 20.
• Regulation of managing agents and mandatory qualifications. 

Some of these proposals may apply to social tenants, including those on fixed service charges. Meeting these new requirements will require careful consideration, as they may result in significant business change projects, investment decisions, and even a reappraisal of development strategies. 

The proposals have the potential to impact multiple service areas within our organisations. Finance, asset maintenance, service charge, and neighbourhood teams are just some who may find their operating procedures need to be reviewed. Organisations must make sure they understand the potential impact this could have.

The need for change 

It is useful to recognise the drivers for change. Negative outcomes under the existing leasehold system are increasingly featured in the media. The mailboxes of parliamentarians can be inundated with complaints from their leaseholder constituents. And that includes situations where housing associations are the landlord and building manager.  

This has resulted in cross-party support for law reform that now has a political momentum of its own. Over 180 MPs became members of the All-Party Parliamentary Group for leasehold reform and commonhold prior to the 2024 general election, which shows the strength of interest across parliament. 

This is not the first time that a government has raised the prospect of leasehold reform and reinvigorating commonhold. But, this time, something feels different. Nobody can predict the extent or timescale for changes at this time, but we must take the current consultation, and the government’s messaging, as a serious signal of intent that more change is likely. 

What you can do

The good news is that, if designed and implemented correctly, the proposals do have the potential to improve outcomes for our leaseholders. And government is listening. The current consultation, and any that follow, are an opportunity for us to provide insight into how best to achieve these aims.

We owe it to ourselves, and to our current and future residents, to contribute to the consultation, so that any changes are a success. You have until 11:59pm on 26 September 2025 to respond.