Writing in the Negotiator, Shabnam Ali-Khan is a Partner at Russell-Cooke and a member of ALEP has warned that the growing tendency to brand leasehold as “fleecehold” and to champion commonhold as the only acceptable alternative risks distorting the leasehold reform debate.

The Leasehold and Freehold Reform Act 2024, pushed through Parliament during the pre-election wash-up, marked a significant — if incomplete — shift in the balance of power between freeholders and leaseholders. Attention now turns to the forthcoming Leasehold and Commonhold Reform Bill, which could go even further by making commonhold the default tenure for new-build flats.

While the desire to protect leaseholders from opaque service charges, excessive ground rents and poor management is well founded, the debate has become increasingly emotional — and, critics say, dangerously one-sided.

Beyond the Headlines

Extreme cases of spiralling service charges, insurance commission scandals and obstructive freeholders often dominate headlines. But these examples, while serious, are not representative of the sector as a whole.

Most leasehold arrangements function as intended: imperfect but workable. With modern drafting, transparent governance, and effective regulation, leasehold can remain a viable and fair system of ownership.

What’s needed, experts argue, is improvement rather than abolition — through tighter oversight of managing agents, greater transparency, and better education for homeowners about their rights and responsibilities.

Legal Challenges and Uncertainty

The Leasehold and Freehold Reform Act 2024 is already facing legal challenge.
John Lyon’s Charity, Cadogan Estates, and others have launched High Court proceedings, arguing that key provisions — including the removal of marriage value and caps on ground rent premiums — breach the European Convention on Human Rights by undermining property rights.

Meanwhile, solicitors and conveyancers report growing confusion among leaseholders about their obligations, from Section 20 consultations for major works to the duties that accompany share of freehold ownership.

Commonhold: Theory vs. Reality

Commonhold is often presented as a democratic, fairer alternative — no ground rents, no external landlord. But in practice, it remains largely untested.

Since its introduction in 2002, only a handful of commonholds have been created in England and Wales. Lenders remain cautious, citing a lack of proven governance models and no right to forfeit a unit in the event of breach — a key concern for mortgage security. Scotland’s experience with similar models has also revealed significant management challenges.

Pragmatic Reform, Not Revolution

“Leasehold is far from perfect. But to treat it as beyond saving — or to present commonhold as a panacea — is misguided.”

Incremental reform offers a more practical route forward. Simplifying Right to Manage, improving lease drafting, and ensuring better-informed consumers would go further to modernise the system than a wholesale switch to commonhold.

Reform must reflect how people actually live, buy and finance property — not just the politics of the moment.

As policymakers prepare the next phase of reform, the sector needs balance, not rhetoric: one that listens to leaseholders and freeholders alike, and seeks workable solutions that endure in practice, not just on paper.