Plans to overhaul England's controversial leasehold system have been unexpectedly postponed by the Labour government, delivering a blow to an estimated 5.2 million households. The delay means crucial protections for leaseholders, including a potential cap on ground rents, will not be introduced before Christmas as previously promised.
Government Blames "Unforeseen Delays" for Setback
Housing Minister Matthew Pennycook has formally confirmed the hold-up, admitting the long-awaited Leasehold and Commonhold Reform Bill will not be published this year. In a letter to the cross-party Housing Committee on Thursday, 19th December 2025, Pennycook cited "unforeseen delays" for the setback.
The proposed legislation was expected to be a landmark reform, tackling what campaigners call exploitative practices within the leasehold sector. Key measures anticipated in the bill include:
- Abolishing the threat of forfeiture, where freeholders can seize a leaseholder's home and equity over unpaid service charges or ground rent.
- Repealing draconian powers related to estate charges on housing estates.
- Implementing reforms to ground rents, a major financial burden for flat owners.
Political and Practical Fallout for Homeowners
The delay has sparked immediate criticism from MPs and housing advocates. Florence Eshalomi MP, Chair of the Housing Committee, labelled the news as "deeply disappointing." She warned that for many, the dream of home ownership has become a "nightmare" due to soaring ground rents and unreasonable fees.
Eshalomi also raised a significant political concern, stating that implementing these complex changes before the next general election in 2029 now poses a "real challenge." This timeline casts doubt on the government's ability to deliver a core manifesto pledge.
Campaigner Harry Scoffin, founder of Free Leaseholders, highlighted the growing market wariness. "Buyers are increasingly wary of purchasing flats with monetary ground rents and lenders’ attitudes are only becoming more conservative," he said. This sentiment is backed by the Competition and Markets Authority, which has previously found such rents to be "neither legally nor commercially necessary."
Pressure Mounts on Labour's Manifesto Promise
The delay places particular pressure on Housing Minister Matthew Pennycook, who in opposition pledged support for 'peppercorning' existing ground rents—reducing them to a nominal fee. Failure to deliver this reform would constitute a breach of the Labour Party's election manifesto.
With the bill now pushed into 2026, millions of leaseholders face continued uncertainty. The sector remains in limbo, awaiting details on how the government intends to cap or abolish what campaigners argue are unfair charges that provide no tangible service in return.
