Commonhold and Leasehold Reform: Managing Agents

Debate between Justin Madders and Florence Eshalomi

Thursday 2nd July 2026 Commons Chamber

[Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)]

I beg to move,

That this House welcomes the Housing, Communities and Local Government Committee’s First Report of Session 2026-27, Pre-legislative scrutiny of the draft Commonhold and Leasehold Reform Bill (HC40); notes the Government’s commitments to cap ground rents and to bring forward legislation in this Session to support the uptake of commonhold in place of leasehold; further notes the concerning practices of some property managing agents who fail to act in the best interests of homeowners; and calls on the Government to accept the Committee’s recommendation to legislate to create a body with enforcement powers to regulate property managing agents.

I am grateful to the Backbench Business Committee for granting time for this important and timely debate, which gives the House the chance to consider our Committee’s report on the draft Commonhold and Leasehold Reform Bill. I thank my fellow Committee members for their collaboration and cross-party work on the report, the excellent Committee staff for their help in preparing the report and the Committee’s two specialist advisers, Professor Nick Hopkins and Wendy Wilson, for their assistance throughout our inquiry.

Today’s motion invites the House to call on the Government to use the final Bill to legislate for the regulation of managing agents. Colleagues from across the House will be all too familiar from their inboxes with the “wild west” of managing agents, but first I would like to begin by discussing some of our findings on the draft Bill more generally.

For many of the 5 million leaseholders across England and Wales, these reforms have been a long time coming. After a decade of campaigning across party lines, we now have an opportunity to finally tackle the fundamental injustices of the leasehold system, once and for all. Leasehold reform has long commanded cross-party support. Ten years ago, the campaign in Parliament was championed by the former Member for Worthing West, Sir Peter Bottomley. His work chairing the all-party parliamentary group on leasehold and commonhold reform amplified leaseholders’ voices across Westminster. I thank the current chair, my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders), for his tireless cross-party campaigning. It is in that cross-party spirit that my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) and Lord Gove generously gave evidence alongside each other in the opening session of our inquiry. The two former Housing Secretaries were united in their view that this draft Bill is welcome, and that the Government must go further and faster to deliver for leaseholders.

The draft Bill is technical and long—it runs to 164 clauses and 13 schedules—but if we take a step back, the problem that it seeks to address is about control. Control is supposed to be one of the main advantages for people of buying their own home.

For many leaseholders, a flat is their first foot on the housing ladder. They may have been drawn in by the banners on new build developments advertising the Government’s Help to Buy scheme. Many leaseholders were told that that was the affordable route to buying, via shared ownership. They expected control and a feeling of security, knowing that they could make the changes that they wanted in their own home and have control over the running costs, and would not be threatened with eviction by a landlord.

The benefits of home ownership simply do not apply to leaseholders. They are homeowners, yet they are tenants. Far from home ownership and the dream that they were sold, many of them are stuck in a living nightmare. In the words of one leaseholder, who shared their story with our inquiry:

“I thought I’d bought a flat, then discovered leasehold is a financial trap. I have no control over my finances, my relationships, where I live, or where I work”.

We all agree that this is an injustice that needs to be addressed. This afternoon’s debate is an opportunity for Members to reflect on the draft Bill and what additional measures might need to be included in the final version to ensure that we get these reforms right.

Perhaps the most headline-grabbing measure in the draft Bill is that it will cap existing ground rents at £250 a year. We must be absolutely clear across this House and in the other place that ground rent is money for nothing. An investigation by the Competition and Markets Authority found “no persuasive evidence” that leaseholders “receive anything in return” for ground rent. Many leaseholders have ground rents that double every 10 years or increase with the retail prices index.

[Justin Madders (Ellesmere Port and Bromborough) (Lab)]

I thank my hon. Friend, the Chair of the Housing, Communities and Local Government Committee, for recognising the work done not only by me, but by Peter Bottomley and Jim Fitzpatrick on the APPG. I was struck by a comment in the Committee’s report about the argument put forward by some freeholders that ground rents are used to cover service charges and that people will be put in danger if they are lost. The Committee used the word “shameful” for that argument. Does that not show that this system is a money-making racket? People are using any excuse to carry on that income stream.

[Florence Eshalomi]

I refer my hon. Friend to the evidence session at which we had representatives of freeholders—one of the most enlightening sessions for my Committee and my colleagues. We probed and pushed and tried to seek justification for ground rents, but none was forthcoming. That shows that they are a money-making scheme.

We must be absolutely clear, as the Competition and Markets Authority has said, that there is no place for ground rents. Last month, there were media reports that the Government are preparing to accept our Committee’s recommendation to bring the £250 ground rent cap into force in late 2027—one year earlier than previously planned. If those reports are correct, that will be welcome news for many leaseholders, who are calling on us to act with greater urgency.

However, even before the final Bill has been introduced, we hear threats of judicial review from a small number of organisations with very deep pockets. Rather than engaging with the process here in Parliament, they are preparing to challenge the democratic mandate of successive Governments, and the will of this House, to make these changes. Shame on them. They know that they have lost the political debate.

The Government should be emboldened by the fact that they have successfully defended judicial reviews in the past. We think they should push ahead with these reforms, but there is a real risk that these measures could be delayed if freeholders do launch such a challenge. The Committee has called on the Government to include a clause for the ground rent cap in the final Bill to ensure that it comes into force two months after the legislation receives Royal Assent.

We support the Government’s intention to change to peppercorn ground rent over time. We understand that that will need a transition period, as Ministers must be confident that they are striking a fair balance between the interests of competing parties, but it is not clear to us how the Government decided on their policy of a 40-year transition. Based on the evidence to our Committee so far, we think a shorter transition period may be justified and fair. That is why our report calls on the Government to publish more data in the coming months so we can be confident that we are getting the transition period right.

Another key focus of the draft Bill is the measure to replace leasehold with a new commonhold tenure. Commonhold will allow all homeowners to have a vote in how their block is run. Homeowners are not required to participate in commonhold if they do not want to, and many blocks will vote to appoint their chosen managing agent, but this modern tenure will offer homeowners the control that they do not have under the current leasehold system.