At the time of writing, the Commonhold and Leasehold Reform Bill still has no published First Reading date. But is it imminent?
Andy Burnham entered Downing Street on 20 July and brought Angela Rayner back to the Ministry of Housing, Communities and Local Government.
Both are known to be committed to leasehold reform. Furthermore, Matthew Pennycook, who has overseen this element of policy for the duration of the current Parliament, remains Housing and Planning Minister.
The Bill – which was promised in the King’s Speeches in both 2024 and 2026 – has the dual benefit of political impetus and departmental continuity.
THE SEPTEMBER WINDOW
The strongest suggestion that the First Reading may be imminent is Matthew Pennycook’s letter to the HCLG Select Committee of 10 July, in which he wrote: “Please rest assured that the government remains acutely aware of the need to act urgently to provide relief to leaseholders and homeowners on freehold estates currently suffering as a result of unfair and unreasonable practices and remains committed to honouring its manifesto commitments in full.
“While the precise date that a substantive response will be issued will be a decision for the new administration, it is my sincere hope that it will be provided soon after the House returns from the summer recess with a substantive Bill introduced to Parliament soon after.”
Both Houses return on 1 September. The Commons then rises for the conference recess after 15 September and the Lords after 17 September.
Labour’s conference begins in Liverpool on 27 September. If Pennycook’s wording still describes the Government’s intentions, there are effectively little more than two weeks in which to act before conference.
EARLY FIRST READING BENEFIT
There are many reasons why Andy Burnham might want to use that window. Angela Rayner has been one of Labour’s most persistent advocates of leasehold reform.
While out of government earlier this year, she was reported to have led more than 80 Labour MPs in pressing ministers not to dilute the manifesto commitment on ground rents.
A September First Reading would let the new administration arrive at conference having converted a long-running promise into published legislation.
A First Reading is largely a formality and takes place without debate, but it is the point at which the final Bill is published.
While it is not an opportunity to progress discussion, it is an important stage the property market understanding the government’s willingness to progress on leasehold reform.
It would however be good to know the final form that the Bill will take. I have written elsewhere about my concern that this Bill may have significant additional clauses added to it to give effect to more of the Law Commission’s recommendations – whilst this may well be a laudable objective, this extra material will not have had the public scrutiny that the current version of the CLRB has had.
If we are looking at a much larger Bill then we will also be looking at a much longer pathway to the statute book.
Uncertainty already has consequences. In June, Zoopla reported that the average UK house cost 1.7 times as much as the average flat, the widest gap it had recorded in 30 years. House prices had risen by 43% since 2016 compared with 10% for flats. Leasehold uncertainty was identified as one factor affecting the pricing of flats.
There is also a housing delivery dimension. Apartment-led development is central to urban regeneration and higher-density housing. Developers, lenders, purchasers and managing agents need to know how the transition from leasehold to commonhold will work and when the ban on most new leasehold flats will take effect. Publication would replace some of that speculation.
IMPORTANT CONSIDERATIONS
An early First Reading should not be confused with readiness for implementation.
The consultation on a possible exception to the £250 ground rent cap for “quid pro quo” leases closes on 27 August. Separate consultations on enfranchisement valuation rates and process costs under the Leasehold and Freehold Reform Act (LAFRA) remain open until 23 September.
In May, the HCLG Select Committee asked the Government to reconsider significant parts of the draft framework, including the route from collective enfranchisement to commonhold. ALEP member Vanessa Griffiths at Knight Frank has also identifiedunresolved questions around cost, consent, value and responsibility.
CREDIBILE NOT INEVITABLE
ALEP members generally support meaningful leasehold reform and want commonhold to succeed in the right context.
We also hope that the government will draw on practitioners’ experience as it improves leasehold and develops commonhold more widely. The experience of LAFRA is a reminder that primary legislation can set a direction long before the regulations, valuation rules, systems and professional capacity needed to make it work are in place.
We would regard a pre-conference First Reading as credible rather than inevitable. Pennycook’s July letter points towards early autumn and Rayner’s return makes acceleration plausible. Against that sits a short parliamentary window and live policy questions that deserve proper treatment.
If the Bill appears before the Labour Party Conference, I think that we will all judge it less by the date on its front page than by whether it provides a coherent route from LAFRA to the new commonhold framework, with workable transition, valuation and management arrangements.
While a September First Reading could be politically useful, its value to the property market will depend on whether the legislation is ready to be relied upon
