Ban on new leasehold flats – how will this affect landlords?

The government has announced a ban on new leasehold flats in England and Wales. But how does this affect buy-to-let landlords?

The changes, which the government are calling “a radical improvement on leasehold ownership”, will see all new leasehold flats banned. Further reforms to existing leasehold properties are set to follow.

Ban on new leasehold flats – a summary

the government plans to ban new leasehold flats (following a ban on new leasehold houses in 2024)
this will give owners of flats (including landlords) more control and a greater stake in their property
landlords could save money on things like ground rent, service charges, and lease extensions
the leasehold ownership system will gradually be replaced by commonhold
the changes are still at the proposal stage and won’t become law for a while

How could a ban on new leasehold flats work?

The proposed changes will see a shift from leasehold to commonhold. This would give homeowners (including buy-to-let landlords) greater control over building management. Leasehold properties typically see a third-party making large scale decisions on behalf of property owners.

A draft setting out the proposed legal framework, known as the Leasehold and Commonhold Reform Bill, will be published later this year. As this is currently only a proposed bill, it could take some time for the changes to become law.

Housing and Planning Minister Matthew Pennycook said: “These reforms mark the beginning of the end for a system that has seen millions of homeowners subject to unfair practices and unreasonable costs at the hands of their landlords and build on our Plan for Change commitments to drive up living standards and create a housing system fit for the twenty-first century.”

You can find out more about the proposed changes on the government website.

What is commonhold?

Commonhold properties are used around the world and were first introduced in the UK in 2002.

Commonhold landlords own the freehold of their individual unit indefinitely, while sharing ownership of the building’s common areas. This differs from owning a leasehold property, where you only own your unit for a fixed period of time.

As a commonhold property owner, you’ll:

become a member of your building’s commonhold association
have input on structural, external, and shared areas of the property
vote as a collective to make decisions about your property

Each commonhold association must have at least two directors. These can be homeowners or hired professionals.

Leasehold vs commonhold – what are the key differences?

Leaseholders only own the property for a set amount of time (the lease)	Commonhold owners have a full freehold ownership of their property (as part of an association)
Leaseholders have no say about how much they pay on service charges and maintenance costs	Commonhold owners can have a say on costs and service charges through their association
Leaseholders have to pay an annual ground rent	Commonhold owners aren’t required to pay an annual ground rent
Leaseholders can’t replace a managing agent (it can only be done by their landlord/freeholder)	Commonhold owners can replace a managing agent who works on their behalf through their association

Ban on leasehold flats – what happens next?

The proposals were originally published as part of a white paper in March 2025.

A draft setting out the proposed legal framework, known as the Leasehold and Commonhold Reform Bill, is due to be published later this year.

As this is currently only a proposed bill, it could take some time for the changes to become law.

These changes complement the existing Leasehold and Freehold Reform Act 2024, which became law in May 2024.

How could a commonhold system benefit buy-to-let landlords?

A commonhold lease would give buy-to-let landlords more control over their property. Here’s just some of the ways a move to the commonhold system could benefit landlords:

an indefinite lease term can positively impact the long-term value of your property
indefinite ownership means more options when looking at investment properties
setting an annual budget for the building means deciding how much is allocated to upkeep and maintenance
no ground rent – so you won’t need to increase the rent you charge to cover this (which could make the property more appealing to a wider audience of tenants)

Ban on new leasehold flats – 3 key takeaways

A ban on new leasehold flats would give owners more control over their property
Flat owners would no longer have to pay ground rent or extend their lease
More details on the proposed changes are due to be published as part of the Leasehold and Commonhold Reform Bill before the end of 2025

Ban on new leasehold flats FAQs

What is the proposed leasehold ban for flats in England and Wales?

The government plans to ban the sale of new leasehold flats, with commonhold becoming the default ownership system. As a result, flat owners would have collective ownership of their property, and no longer have to pay ground rent or extend their lease.

Does the leasehold ban affect existing flats?

The new laws would only benefit buyers of new flats. However existing owners of flats will benefit from measures in the The Leasehold and Freehold Reform Act 2024, which aims to reduce the cost of extending a lease, make it easier for leaseholders to buy a share of their freehold, and improve transparency of service costs.

When will the leasehold ban start?

It’s not yet clear when the leasehold ban will come into effect. However, it could take a while. This is because the government is due to publish the Leasehold and Commonhold Reform Bill in the second half of 2025. It will then need to run a consultation and draft further legislation before any changes can be implemented.

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