Keynote speech by Matthew Pennycook MP, Minister for Housing and Planning – 29 April 2026

In January, the Government published the Commonhold and Leasehold Reform Bill, marking an important step in its long-term ambition to fix issues in this highly complex area of property law.

Following the speech, we will explore the Government’s vision further, along with the practical challenges of making it work in practice. I am also going to ensure there is plenty of time for questions from those in the audience and those joining online, so please have your questions ready. For those joining us remotely, please send your questions through the Slido app.

With that, I will hand over to Matthew. Thank you very much.

Good morning and good afternoon, ladies and gentlemen.

It is both a privilege and a real pleasure to be here with you. No doubt many people assume that the intricacies of English property law make for one of the driest topics imaginable for a keynote speech. Yet those of us immersed in its complexities and challenges not only appreciate its importance, but more importantly recognise that the arrangements surrounding leasehold ownership, commonhold, freehold, ground rents, and service charges deserve far more attention than they currently receive.

These seemingly prosaic matters are a source of acute financial hardship and misery for huge numbers of people living in the approximately five million leasehold dwellings in England and Wales.

To illustrate the plight of leaseholders today, let me share the stories of Tara and Andy, just two of the many leaseholders in my South East London constituency who have contacted me for help in recent months.

Tara lives in a modest flat in Woolwich. She now pays over £4,400 a year in service charges. When she bought the property four years ago, she paid just over £1,230. That is an increase of almost 260%, without any corresponding improvement in the range or quality of services she receives.

Andy lives in a flat in East Greenwich. On top of his service charges, he now pays just under £800 a year in ground rent for no service whatsoever. Under the terms of his lease, which allow for inflation-linked increases every ten years, that figure could rise to well over £1,000.

It is not just leaseholders in the capital who are being routinely gouged in this way by freeholders and managing agents acting on their behalf. The examples I have given are not even particularly egregious.

As anyone who has owned a leasehold house or flat, as I have, will know, these cases are symptomatic of a system that denies leaseholders control over the homes they live in and have paid for. Instead, they are subjected to excessive financial extraction in the form of punitive and escalating ground rents, unreasonable and extortionate service charges, unjustified permission and administration fees, and onerous conditions often imposed with little or no consultation.

I have said it many times before, and I will say it again today: this is not what home ownership should entail.

Leasehold is blighting lives. It is a barrier to a fair, efficient, modern residential property market. Leasehold is an anachronism in the twenty-first century.

The aim of this Government, by the end of this Parliament, is nothing short of dismantling the leasehold system and delivering the corresponding emancipation of leaseholders.

To understand how to dismantle the leasehold system, its dynamics need to be fully understood. In that regard, it is not hyperbole to suggest that it remains essentially feudal in nature.

The term “freeholder” was used in the Domesday Book of 1086. The first leasehold estates appeared just a few decades later. They were established to allow villeins or serfs to work plots of land for fixed periods, paying in kind through food and services to those higher up the social order, principally landowners.

The fundamental principles of that arrangement — third-party landlord control, temporary rights of ownership that diminish in value over time, and financial extraction through rents, charges, and fees — still underpin the leasehold system today.

The 1920s saw the birth of the modern leasehold system. Landlords, affected by new legislation that suppressed rents and restricted their rights to evict tenants, began selling long leases on properties, typically for 99 or 125 years, as a means of generating revenue without surrendering ownership of the land.

The century since has been marked by intermittent and well-intentioned, but flawed, attempts to protect leaseholders from the consequences of the fundamental unfairness that underpins leasehold law.

The Leasehold Reform Act 1967 conferred widespread enfranchisement rights on leaseholders of houses. The Landlord and Tenant Act 1985 introduced protections against unreasonable service charges. The Leasehold Reform, Housing and Urban Development Act 1993 extended enfranchisement rights to leaseholders of flats.

The Commonhold and Leasehold Reform Act 2002 introduced the right to manage, expanded enfranchisement rights, and attempted — ultimately unsuccessfully — to lay the foundations for widespread adoption of commonhold.

The Leasehold Reform (Ground Rent) Act 2022 abolished ground rents for new leases but left existing leases untouched.

Most recently, the Leasehold and Freehold Reform Act 2024 implemented selected recommendations from the Law Commission’s reports, providing leaseholders and homeowners on privately managed estates with additional rights, powers, and protections.

Successive rounds of reform have undoubtedly provided leaseholders with relief from a range of unfair and unreasonable practices. Yet week after week we still see new leasehold horror stories emerge because none of those reforms fundamentally disturbed the historical inequities upon which the present leasehold system rests.

Only by addressing those inequities can we ensure that the dream of home ownership becomes a reality for millions of leaseholders across the country.

That is why this Labour Government made a clear and unambiguous manifesto commitment to act where previous governments failed and finally bring the feudal leasehold system to an end.

However, in making that commitment, we were not promising the immediate abolition of leasehold outright. Anyone with even a rudimentary understanding of leasehold knows that abolishing around five million leases overnight would be extraordinarily difficult.

Those advocating for such an approach cannot explain how it would be lawful, how the mortgage market would cope, how the Land Registry could instantly replace millions of leasehold titles with commonhold ones, or how millions of commonhold associations could suddenly be created and managed.

Abolishing leasehold outright is a slogan, not a serious policy proposition.

Instead, we are committed to the hard work of bringing the system to an orderly end during this Parliament.

What does that mean in practice?

It means preventing the leasehold system from perpetuating itself while empowering existing leaseholders to gain control of their buildings and exit the system if and when they choose to do so.

To stop the renewal of leasehold, we are legislating to make commonhold the default tenure.

Commonhold is a modern home ownership structure used widely around the world. It is not merely an alternative to leasehold ownership but a radical improvement upon it.

At the heart of commonhold is a simple principle: the people who should own and control buildings, including their management, shared facilities, and related costs, are not third-party landlords but the people who actually live in them.

Commonhold preserves homeowners’ interests in perpetuity. It gives residents decision-making powers over how their homes are managed, how money is spent, and how buildings adapt to changing needs over time.

The draft Commonhold and Leasehold Reform Bill we published in January will reinvigorate commonhold through a comprehensive new legal framework that addresses the flaws of the 2002 Act.

The draft bill also includes provisions to ban the use of leasehold for new flats, complementing the existing ban on new leasehold houses. Once these measures come into force, new leasehold developments will effectively cease to exist, except in exceptional circumstances.

Existing leaseholders will not be left behind.

Our draft bill includes a new and improved process for converting to commonhold, making conversion possible where at least 50% of qualifying leaseholders agree.

We will also implement measures from the Leasehold and Freehold Reform Act 2024 to make enfranchisement cheaper and easier.

This includes removing marriage value from calculations, capping the treatment of ground rents at 0.1% of freehold value, and implementing mandatory leasebacks so that leaseholders are not forced to purchase expensive commercial units or non-participating leases as part of enfranchisement claims.

The substantive Commonhold and Leasehold Reform Bill is expected to contain around 260 clauses and 20 schedules. It represents one of the most ambitious overhauls of land and property law in a century.

There will undoubtedly be challenges. Some issues, particularly development value as a barrier to enfranchisement, do not lend themselves to simple solutions. But I want to assure leaseholders across the country that we will not avoid these difficult questions.

The result of these reforms will be more leaseholders empowered to take control of their buildings and convert to commonhold where they choose.

That is how leasehold ends: not through abrupt destruction, but through a methodical process that closes the door on leasehold’s future while opening practical escape routes for those living under it today.

These reforms are carefully considered, proportionate, and fair — but they are also real and irreversible.

We have always been honest that this transformation would take time. The consequences of previous governments’ lack of ambition mean that delivering meaningful reform requires sustained legislative work throughout this Parliament.

At the same time, we are strengthening protections for existing leaseholders now.

We are proposing to cap ground rents at £250 per year, with reductions to peppercorn rents after 40 years. We are abolishing forfeiture and replacing it with a modern, proportionate lease enforcement system with proper safeguards and judicial oversight.

We are consulting on mandatory qualifications for managing agents and giving leaseholders stronger powers to challenge and replace them.

We are also implementing secondary legislation to improve transparency around service charges, regulate building insurance commissions, and rebalance legal costs so leaseholders are not deterred from challenging unfair practices.

Although today’s speech is not focused on freehold estates, we are also acting to address unfair maintenance costs and disproportionate enforcement powers affecting homeowners on privately managed estates.

Let me conclude by saying this: it took 29 years, from 1896 to 1925, to establish the modern leasehold system at a time when both law and society were far less complex than they are today.

This Labour Government intends to bring that system to an end in just five years.

We are pursuing the most ambitious overhaul of land and property law in over a century.

To those who say we are dragging our feet or caving to vested interests, I respectfully say that you are not engaging seriously with the scale and ambition of the reforms we are advancing.

We know leaseholders are suffering now. We understand their frustration after years of broken promises. But mark my words: we are going to get this job done.

No amount of parliamentary resistance or litigation will deter us.

We successfully defended challenges to the 2024 Act in the High Court last year, and we will defend the appeal just as vigorously.

We will do what is necessary to dismantle this archaic and inequitable system, deliver a fair and efficient modern residential property market, and transform the experience of home ownership for millions of leaseholders across the country.

Not overnight. Not in a single piece of legislation. Not recklessly.

But decisively — and for good.

Thank you.