Government aims to introduce leasehold reform legislation this year, Rayner says

The government intends to make commonhold the default tenure for new build flats. 

At the session, HCLG committee chair Florence Eshalomi said “so many leaseholders up and down the country” have seen their dream of owning a home turn into a “nightmare”. 

“When will leaseholders see reform coming forward, or do they have to wait another year before anything is done?” she asked. 

Ms Rayner said: “There was work done on leasehold reform by the previous government, but there were big gaps within that bill which were quite complex.”

She said the Labour government included proposed leasehold reform legislation in the King’s Speech. 

“We want to make sure we’re moving at pace. We want to take that forward as quickly as possible, but we also want to make sure that there [are not] unintended consequences because there are a few gaps within that legislation currently that could cause problems,” she explained.

Under the Leasehold and Freehold Reform Act 2024, which was hurried through parliament before it was dissolved for the election, a ban was imposed on selling most new houses under a leasehold tenure. 

However, Ms Rayner highlighted that the legislation did not include flats “so there is importance to making sure that we’re able to influence that legislation and bring commonhold as the default position”. 

Under commonhold, residents own their own flat and are members of an association that owns the common parts of the building.

The system gives control to flatowners and imposes responsibilities around the building’s maintenance and repair. Commonhold owners can choose a managing agent to run the building on their behalf.

Commonhold is similar to flatownership systems in many other countries including the US and Australia. But just 20 commonhold schemes have been completed in England and Wales since the creation of the tenure in 2002.

Elsewhere, Ms Rayner said she is determined to hit the 1.5 million homes target set by the government for this parliament. 

She said the whole cabinet is “determined I don’t lose”.

“I hate losing. I’ve always been underestimated all my life, and I’m determined, personally, not to lose this fight either,” she stated.

But Ms Rayner added: “Even if I and this government achieve a 1.5 million homes target, it is a dent. It is a dent in what we need to achieve as a whole country to deliver the houses we desperately need.”

In November, large retirement developer McCarthy Stone told Inside Housing that it backed commonhold ownership as an alternative to leasehold.