Consultation on moving to commonhold: Banning leasehold for new flats

L&Q response

April 2026

 

Executive summary

Shared owners and leaseholders have been vocal about their experience under the current leasehold system and the desire for greater transparency and control. In this context, L&Q welcomes MHCLG’s efforts to introduce a homeownership structure that reforms the existing leasehold system and provides a greater feeling of openness and control for residents.

Banning leasehold for new flats has significant implications for the social housing sector. As well as being a major developer, L&Q is also usually the long-term custodian of a building once it is built. This, combined with the need to meet regulatory requirements and our social purpose to provide quality homes, means we have an ongoing stake in ensuring buildings are well maintained. As a result, it is critical that we have appropriate control over strategic decisions on building management. 

Due to the complexity of the development and management of affordable housing, housing associations(HAs) often hold homes in mixed tenure blocks. In a scenario where a commonhold association is formed and social rented homes are the minority tenure in the building, L&Q would not hold the majority vote and will lose ability to make strategic decisions. If other Commonholders are not engaged or knowledgeable on building maintenance this may result in significant issues such as a lack of insurance or inadequate cover, failure to comply with building and fire safety regulations, and poor maintenance of the building, also creating the risk that L&Q fails to comply with the regulatory requirements that we will still be held accountable for.

We urge government to introduce a legal mechanism to ensure that, when a social housing resident lives in a commonhold block or shares facilities with one (in the case where are multiple blocks in the same development), social landlords can oblige Commonhold Associations (CAs) to comply with all regulatory requirements, including those applying to HAs.9 Without this, it would become very difficult for L&Q to build mixed‑tenure blocks. Moving away from mixed‑tenure buildings or designing out shared facilities between blocks would be a last resort. Mixed‑tenure development plays an important role in tackling stigma associated with social housing and promoting inclusivity. Ending mixed tenure or separating facilities would also have cost and viability implications, particularly for multi-phase developments or smaller schemes that may consist of only a single block.

L&Q would like MHCLG to consider the following to ensure the commonhold transition is a success:

  • In most cases, CAs will need to employ professionally qualified managing agents. The implementation of the remaining recommendations of the Regulation of Property Agents: Working Group should be included in the definitive version of this Bill. This is especially crucial in the case of Higher Risk Buildings, which are complex to manage and highly regulated.
  • We encourage the permission of long leases for flats acquired by Right to Buy etc., and suggest the government apply a “threshold” rule where only when 50% of homes have a long lease can a 
    commonhold be formed.
  • We are seeking clarification on any ways the Housing Ombudsman or the Regulator of Social Housing (RSH) will expect HAs to interact with CAs where we are a member, or where a conversion to commonhold takes place.

About you questions

Question 1: If you’re responding on behalf of an organisation, please provide the organisation’s name and the contact details of a nominated contact.

Organisation: London & Quadrant

Nominated contact: Claudia Kitchen; Email: claudiakitchen@lqgroup.org.uk.

 

Question 2: In what capacity are you responding?

  • homeowner, including leaseholder or prospective buyer
  • private intermediate landlord (head lessee)
  • private landlord (that owns the freehold of a leasehold property)
  • local authority or relevant representative group
  • housing association or relevant representative group
  • developer, home builder, or relevant representative group
  • managing agent, property agent, or relevant representative group
  • lender, valuer, insurer, or relevant representative group
  • legal professional, conveyancer, or relevant representative group
  • other, please specify

 

Question 3: If you are responding as an individual, in which region(s) do you live? If you are responding on behalf of an organisation, in which region(s) do you primarily operate?

  • North East
  • North West
  • Yorkshire and the Humber
  • East Midlands
  • West Midlands
  • East of England
  • South West
  • South East
  • London
  • Wales
  • national organisation
  • other, please specify

 

Question 4: For developers/landlords/manging agents: How many flats (individual units) do you currently own or manage?

  • 0 to 25
  • 26 to 50
  • 51 to 100 - 250
  • 251 to 500
  • 501 to 1000
  • 1001+

 

Question 5: For developers: Approximately how many new flats (individual units) do you expect to deliver in the next 5 years?

  • 0 to 50
  • 51 to 100
  • 101 to 200
  • 201 to 300
  • 301 to 400
  • 401 to 500
  • 501 to 1000
  • 1001+

 

Scope of the ban

Question 6: Do you agree with the proposed definition of a “flat” for the purpose of the ban. [Yes / No]

There are already three existing statutory definitions of “flat” that are relevant:

  • S101 of the Leasehold Reform, Housing and Urban Development Act 1993, which is the definition used for Enfranchisement and Lease Extensions
  • S60 of the Landlord & Tenant Act 1987, which is the definition used for residents’ collective right of first refusal on disposal
  • S112 of the Commonhold and Leasehold Reform Act 2002 which is the definition used for the Right to Manage.

The three existing definitions, and the one proposed, are each slightly different, though probably have a substantially similar meaning. There is one potentially material difference, in that S60 of the Landlord & Tenant Act 1987 talks of the flat being “divided horizontally from some other part of that building” whereas the other definitions talk of the flat either having “the whole or a material part” of it lying “above or below some other part of the building.” 

Firstly, we would encourage government to take the opportunity to ensure these definitions are aligned. 

Secondly, we would suggest that the word “material” is removed from these definitions. It creates uncertainty over the degree of underhanging or overhanging necessary to be a “flat” in figure 2b. There would need to be a consequential amendment to s5(2) of the Freehold and Leasehold Reform Act 2024.

 

Question 7: Do you agree with the proposed scope of the ban (categories in A-E above)? 

A. Purpose-built new developments. Agree / Disagree. 

B. A house newly converted into flats. Agree / Disagree. 

C. Commercial buildings newly redeveloped to contain flats. Agree / Disagree. 

D. Purpose-built rental blocks whose owners have later opted to sell flats for homeownership. Agree / Disagree.

E. Other residential buildings where there are no existing registered long residential leases. Agree / Disagree.

 

Question 8: Should an owner of a building with a sitting commercial tenant and no residential long leases be required to change the building to commonhold if they wish to sell a new flat in the building? [Yes / No]

It is essential that the leasehold ban is consistent and fair. We don’t believe that buildings should get an exemption from the ban simply because they have a commercial tenant.

 

Considering the case for exemptions

Question 9: Besides shared ownership (including specialist variants of shared ownership), home purchase plans, and equity release products, are there any other types of residential long leases that will be necessary within a commonhold?

We support the ambitions of the government to put in place ban exemptions in the instances of Right to Buy, Right to Acquire, Right to Buy, or London Living Rent, as this would place an inappropriate burden on L&Q. To convert to commonhold, L&Q would have to do the following: 

  • Create a new Limited Company, which will be the Commonhold Association. 
  • Create new titles at the Land Registry for the freehold interest in each individual flat and the common parts.
  • Transfer the freehold interest in the common parts to the Commonhold Association
  • Transfer one of the new unit freehold titles to the new purchaser
  • Retain the remaining 99-unit freehold titles ourselves
  • Appoint directors to the Commonhold Association
  • File Accounts for the Commonhold Association annually at Companies House
  • Include the Commonhold Association as a subsidiary for accounting purposes, regulatory reporting etc
  • Hold AGM's etc.

We suggest the government apply a “threshold” rule where only when 50% of homes have a long lease can a commonhold be formed.

 

Question 10: Which, if any, of the above types of land that cannot be registered as commonhold should continue to be excluded and therefore exempt from the ban?

A. To avoid the creation of flying freeholds, the creation of commonhold land at first floor level or above is prohibited unless all the land below it and down to the ground is part of the same commonhold.

Yes, these should continue to be exempt. However, we suggest including underground structures such as car parks in this stipulation to further prevent flying freeholds. The creation of commonhold should not be possible unless the whole building and any shared structures (including those below ground) are included as part of the same commonhold.

B. Certain sites used for agriculture, such as those with a farm business tenancy, or a tenancy of an agricultural holding, cannot be registered as commonhold.

Continue.

C. Land subject to a compulsory purchase order cannot be registered as commonhold.

Continue.

D. Certain sites for institutions or places of worship, including land reserved for educational institutions (for example, museums or libraries), and sites used for worship (for example, a church or temple).

Continue.

E. Certain sites that have been used for schools, for example land which is held subject to a grant under the Schools Sites Act 1841 reverts to the grantor when the land in question ceases to be used for a school.

Continue.

 

Question 11: We welcome your views on whether any land ownership arrangements, or types of development, should be exempt from a ban on new leasehold flats:

N/a.

 

Structure of the ban on new leasehold flats

Question 12: Please provide any views or suggestions on the proposed structure of the ban [Free text box].

We believe the proposed structure to be reasonable. We would like to make sure that the prescribed “warning notice” for the prospective buyer who is buying an exempt lease flat can be put in the contract pack. This would avoid delays in shared ownership sales.

 

Timetable for moving to commonhold

Question 13: Do you anticipate that you, your organisation or your sector will begin using, or supporting the use of, commonhold once the new commonhold model is introduced, or only once the ban is in place for new flats? [Once the new commonhold model is introduced / Only when the ban comes into force / Other]

L&Q is supportive of granting leaseholders and shared owners more transparency and control over their buildings. We would therefore prefer to begin using the new commonhold model as soon as it is introduced. This would also be helpful in anticipation of the ban as it will give us more time to test and trial best practices.

However, regarding the leasehold ban in new developments, we question whether the proposed timeliness feasible considering the infrastructure required to deliver it (the specifics of which are elaborated on in our response to question 14). We also question the practicality of the 2029 date in the context of other developments in the sector. L&Q develops thousands of homes per year, has almost 9,000 homes in its current development pipeline, and manages 109,658 homes (1). We are also in the process of transforming our IT and operational systems to comply with upcoming regulations such as Awaab’s Law, cladding remediation requirements, the Future Homes Standard, STAIRs and others.

Even if we receive clear government guidance on how Commonhold will work in practice, it will take a significant amount of time and resource to ensure IT, operational, governance and legal structures are in place to manage Commonhold adoption and staff are trained. Given that we need to maintain focus on increasing affordable housing supply and preserving existing homes, we do not think it would be feasible to commence using commonhold before the ban comes into force.

In the case of supporting commonhold implementation in existing buildings, our approach would depend on the tenure mix.

  • Where we are the leaseholder for over 50% of the units and thus retain decision-making power to convert to a commonhold, we will likely abstain from doing so due to the significant administrative and legal burden of this (some of which is mentioned in our response to Question 9). In practice converting to a CA would not have a large impact as we would retain decision-making power over the building either way, thus it is practical to avoid putting CA mechanisms in place.
  • Where non-L&Q leaseholders meet the threshold without our vote and choose to convert to commonhold, and we hold a stake in the building as either the freeholder or a fellow leaseholder, we absolutely support this, as it is their legal entitlement. However, as in our executive summary, in the case where there are social tenants living in a commonhold, we require a legal mechanism to ensure that regulatory requirements are met.
  • Where our vote is the decider on commonhold conversion, but we would form a minority in the CA, we would likely vote to not convert to ensure we retain strategic decision-making authority over the building.

 

Question 14: What actions or activities would you, your organisation or your sector need to undertake to prepare for the widespread use of commonhold? And how long would these take?

Preparing for commonhold will be a significant undertaking for L&Q. We would need to:

  • Adapt our IT/Housing Management systems and data collection procedures to meet the requirements. Clearly, we will need to create a system to record any buildings where CAs have 
    been formed, and to monitor the activity and decisions of the CA which pertain to buildings where we have an interest. It is particularly important to identify shared owners in commonholds, as in these cases the shared owner will pay their service charge directly to the CA. We will also have to monitor whether a leasehold building has been converted to commonhold. 

− The way we report ownership to RSH will likely change to include commonhold, making this especially pertinent. The Statistical Data Return asks whether we own properties on a freehold or leasehold basis, whilst commonhold is strictly a type of freehold they will presumably introduce something additional here. We also must report on subsidiaries and some CAs will potentially fall into this definition.

  • Formalise commonhold legal and governance policies and procedures, for: 

− establishing CAs (which will be new limited companies, and potential subsidiaries of L&Q)

− managing our interest and representation in the CA - e.g. appointing Directors to commonhold associations (and deciding where this would sit in the business), attending meetings with the 
other unitholders etc.

  • Provide staff training (e.g. for those who are CA Directors and attend meetings; several teams throughout the business such as housing management, legal, sales and marketing, service charge, homeownership, development, etc.)
  • Ensure development pipeline compliance. In addition to ensuring compliance, as elaborated on in our response to question 25, arrangements will need to be made so where we have leased land from a freeholder, we can sell blocks built on this leased land as commonhold. 

Several teams throughout the business would likely have to take on projects that require months, if not more than a year, of resource to adapt to the changes.

 

Question 15: From the point at which the revised commonhold law comes into force, how long would you, your organisation or your sector need to prepare for using commonhold as the default tenure in new blocks? [No time / 1 years / 2 years / 5 years / other]

The exact amount of time depends on the details of the final Act. However, this will be a significant undertaking due to the actions listed in our response to question 14 and other regulatory changes occurring alongside this. We would need a minimum of one year from the passing of legislation.

 

Question 16: Should the UK government introduce the ban on new leasehold flats with a single implementation date for everyone, or should it be staggered, allowing certain types of new building or developments more time to adopt commonhold? [A. The ban should commence at a single point / B. The ban should be staggered]

Smaller and simpler buildings should have the ban applied to them first, followed by developments involving mixed tenures, larger or higher-density buildings, and/or complex infrastructure. These schemes need more time to adapt to commonhold, and allowing this would help minimise development pipeline disruption and protect residents from unintended consequences.

 

Question 17: Do you agree that self-contained blocks that have already sold new leasehold flats at the time the ban is commenced should be able to continue to do so? [Yes / No] 

This makes sense from a logistical standpoint. A leasehold building can convert to a commonhold if they wish to.

 

Question 18: If you answered yes to the previous question, how long should developers have to complete the self-contained block? [No time limit / 1 years / 2 years / 5 years / 10 years / other] 

5 years is an appropriate amount of time to finish a building a block once the first flat is sold.

 

Question 19: Are there any alternative approaches to dealing with phased sites?

In the case mixed tenure blocks become too complex for L&Q to develop, regeneration schemes with multiple phases would likely be interrupted by the leasehold ban. This is further elaborated on in our response to Q27.

Concerns regarding phased regeneration schemes on leased land are elaborated on in Q25.

 

Question 20: Where land is owned on a leasehold basis at the point the ban comes into force, what further conditions, if any, should enable the site to qualify for an exemption? 

Please tick which, if any, of the following should apply:

  • the leased land was acquired before the ban is commenced
  • the site has planning permission at the point the ban is commenced
  • the site is under construction at the point the ban is commenced
  • the first sale of a leasehold flat occurs within a fixed period of time after the ban is commenced
  • none of the above
  • other (please specify): Pre sales have commenced at time the ban is applied

 

Question 21: If you selected ‘the first sale of a leasehold flat occurs within a fixed period of time after ban has commenced’, please specify the time period:

N/a.

 

Question 22: Where a site is owned on a leasehold basis, should the developer have a fixed amount of time to finish selling leasehold flats on the site once the ban has commenced? [Yes / No]

Developers and HAs cannot control external factors such as market conditions leading to poor sales. If a time frame is essential or mandatory, then it needs to be more than 2 years.

 

Question 23: If Yes, how long should the developer have to sell the remaining leasehold flats on the site once the ban has commenced?

N/a.

 

Question 24 - For developers/landowners only: Do you own any land intended for residential or mixed-use development on a leasehold basis? [Yes / No]

Any land that is intended for residential or mixed used development owned on a leasehold basis has already begun development and/or has units already sold on a leasehold basis.

 

Question 25: Are there any alternative approaches for dealing with historical leased land?

On our long-term development and regeneration schemes, such as our projects at Barking Riverside and

Acton Gardens, L&Q is required through our legal arrangements with the respective landowners to take leases of blocks from the freeholder and then grant leases to individual buyers. As these schemes are multi-phase, granting these leases to residents on sale can occur several years after the land is acquired on a leasehold. For example, at Acton Gardens, since the outline planning application was approved in 2011, L&Q (in conjunction with its joint venture partner, Vistry) has subsequently submitted individual planning applications for around 30+ phases and the regeneration does not currently have an end date. The latest phases are due to complete later this year but there are still multiple phases to be built, potentially extending to 2042. This is presumably well after the ban is to be implemented, and thus, without the leasehold ban we would be granting leases for more than another decade.

These legal arrangements could be renegotiated to allow for a switch to commonhold. They have already been renegotiated to a degree to permit freehold sales of houses, but what is required now is a much more substantial change to the terms of the arrangements. From our perspective, we would prefer for either the transitional arrangements to allow for the programme to be completed on a leasehold basis, or for the legislation to compel the underlying freeholder to enter variations necessary to enable the use of commonhold at these schemes. One option could be to widen the rights of enfranchisement to enable developers to acquire freeholds for the purpose of disposing as a commonhold. Government should take note of the resources required to re-negotiate these contracts to comply with the leasehold ban should this be required.

 

Further refinements to support market-wide adoption of commonhold

Question 26: Are there any technical or minor changes to part 1 of the published Draft Commonhold and Leasehold Reform Bill that would better support specific private sector-led development models or forms of homeownership? 

N/a.

 

Question 27: Are there any technical changes to the published Draft Commonhold and Leasehold Reform Bill that would further enable the affordable housing sector to use commonhold?

As mentioned in our executive summary, we believe that a significant unintended consequence of this legislation as it stands is that it will make delivering mixed tenure blocks challenging, due to the likely complexities of managing such blocks in future. L&Q and much of the social housing sector have been advocates for mixed tenure housing, as this helps foster inclusive communities, encourages a more balanced living environment and positive culture, with residents from diverse backgrounds and life stages living together. It can also play a key role in de-stigmatising social housing and those who live in it.

Ending mixed tenure would also have cost and viability implications. For smaller schemes that would previously consist of a single block, this would now have to consist of two buildings with separate facilities. It would also have implications for the successful implementation of large‑scale regeneration and development pipelines. The tenure of a housing scheme is usually fixed at the point planning permission is granted. Because construction and sales cycles often span years, any changes to tenure rules can create major practical challenges. Large, multiphase developments can take decades from the initial planning consent to the final sale of homes. Although developers can begin designing future schemes to avoid such issues, there will inevitably be a transitional period where design changes cannot realistically be made between planning approval and the ban coming into force. 

As the legislation currently stands, new build scheme design is likely to change to remove shared facilities between different tenure blocks so L&Q can maintain control and ensure adequate facilities and services for social housing residents. This could undermine scheme viability and, in turn, make it harder to meet government housing delivery targets. It may also increase reliance on grant funding to fill emerging viability gaps. A key example is energy centres: splitting these so that separate centres serve Commonholders and social rent homes would increase construction costs. However, retaining a single shared energy centre would require strong protections, such as a restrictive covenant in the Commonhold Community Statement (CCS), to guard against the potential for Commonholders from altering its operation in ways that could disrupt supply to other tenures.

A solution would be for government to create a legal mechanism to ensure that commonholds with social housing residents comply with regulatory requirements, regardless of if they are not in the majority. L&Q would also take on the responsibility of participating in the CA and possibly appoint a CA director, which would incur significant costs, as it involves establishing new positions and navigating further organisational complexities.

While the draft Bill is clear that freeholders will not be forced to convert to Commonhold, we urge government not to enforce this on HAs through another measures. It is not clear whether RSH or the Housing Ombudsman will expect L&Q to convert to commonhold where this is an option for them, as, for example, a part of the RSH’s consumer standards or Tenant Satisfaction Measures.

 

Question 28: Are there any types of commonhold building or development (for example those over a certain number of units) which should be required to appoint professional directors and/or managing agents? [Yes / No] 

Any high-risk buildings (as defined in the Building Safety Act) should be required to appoint professional directors and/or managing agents, due to the complexity and importance of building safety regulations.

 

Question 29: Apart from professional management, are there any additional requirements that should apply to owners of particularly large or complex commonhold buildings? Please outline the nature of the building and any additional obligations you think should apply:

N/a.

 

Question 30: Do you agree with our proposed definition of ‘micro-commonholds’ as those which contain 4 residential units or fewer? [Yes / No]

 

Question 31: If no, where do you think that threshold should be set?

N/a.

 

Question 32: Should any legal obligations on commonhold associations be removed or made optional for very small, simple commonholds? [Yes / No]

The examples provided by the consultation document are sensible, e.g. having different rules for appointing Directors. 

 

Understanding costs and benefits

Question 33: For those involved in the development, marketing, sale and conveyancing of new blocks of flats, in the past 3 years, what percentage of these typically have the following features?

Please provide an approximate percentage for each:

  • 990-year leases (or longer) as standard [None, 0 to 25%, 26 to 50%, 51 to 75%, 76 to 100%, don’t know] 
  • sold as share of freehold [None, 0 to 25%, 26 to 50%, 51 to 75%, 76 to 100%, don’t know] 
  • a resident management company (regardless of whether it owns the freehold) [None, 0 to 25%, 26 to 50%, 51 to 75%, 76 to 100%, don’t know] 
  • a resident management company that owns the freehold of the building/s [None, 0 to 25%, 26 to 50%, 51 to 75%, 76 to 100%, don’t know]
  • professional managing agents responsible for the upkeep of the building [None, 0 to 25%, 26 to 50%, 51 to 75%, 76 to 100%, don’t know] 
  • a reserve fund in place from the outset [None, 0 to 25%, 26 to 50%, 51 to 75%, 76 to 100%, don’t know]

 

Question 34: Will you or your organisation need to implement new, or update existing, systems to adapt to the use of commonhold? [Yes / No]

These are mentioned in our response to Q14. The move to commonhold is highly complex and affects almost every area of the business. We are also currently switching to a new housing management system and working to change systems to comply with several different regulatory changes. Given these internal resource constraints, and in lieu of clarity on the definitive scope, design, and timing of the leasehold ban, we are unable to provide an accurate estimate.

 

Question 35: Will your organisation need to train/upskill staff to adapt to the use of commonhold? [Yes / No]

All staff will need to obtain a level of Commonhold knowledge, and for those directly involved in managing blocks, this would need to be detailed. Again, it is difficult to gain cost estimates in lieu of clarity on the scope.

 

Question 36: Will you or your organisation need to consult external professionals to adapt to the use of commonhold? (E.g. legal professionals, consultants etc.). [Yes / No]

As above - it is difficult to produce cost estimates or specific plans for adaption at this stage.

 

Question 37: Do you expect any costs to arise from complying specifically with the ban (e.g. adapting marketing materials, issuing warning notices, including prescribed clauses in exempt leases)? [Yes / No]

For shared ownership leases, legal changes are typically incorporated by Homes England / the GLA through updates to the model leases. Our in‑house legal team would then adapt these models to include our standard clauses and create updated internal templates. We would expect a similar process to apply to outright sale leases, with any required amendments incorporated into the base documentation used by our plot sales solicitors during scheme set‑up. As such, any associated legal work would ordinarily be captured within existing scheme set‑up fees rather than generating new, standalone costs.

Any updates required to customer‑facing documents (such as marketing material) would usually be undertaken by our brand team following instruction, within existing business processes.

Where notices or communications are required for completed sales - if changes were to apply retrospectively to existing leases—these would be managed by our Neighbourhood teams. As this activity would sit within business‑as‑usual operations, we are unable to provide an estimate of any additional costs associated with this work.

As previously stated, costs are difficult to estimate. However, we would like government to be aware that under current arrangements, HAs procure services such as repairs, maintenance, and insurance are procured across large portfolios. This results in economies of scale and thus cost savings. Under commonhold arrangements, this may change as procurement would switch to individual buildings.

 

Question 38: Do you anticipate any efficiencies to arise from the adoption of commonhold in the form of cost savings for you or your organisation? [Yes / No]

Legal costs associated with leaseholder and shared owner legal disputes over service charges, as they will be setting service charge budgets themselves. 

 

(1) L&Q's Financial statements 2025 (PDF)