Shared Ownership and leasehold reform: What it means for you 

It’s official: major changes to leasehold ownership are coming. This spring, the UK Government held fast to its promise to overhaul the system as part of its broader Plan for Change by detailing its plans to transition to a commonhold model. This follows the passing of the Leasehold and Freehold Reform Act 2024 last May, which aims to strengthen leaseholders’ rights. 

Keep reading to learn more about the proposed changes, the impact on current leaseholders and future homeowners, and how the reforms will affect Shared Ownership. 

What is leasehold? 

Leasehold is a type of property ownership where you buy the right to own a property for a fixed amount of time. At the end of this period, ownership reverts to the landlord of the property, also known as the freeholder, or the owner may request to extend the length of their lease. While leaseholders own their homes, they don’t own the land or building the property is built on. Because of this, they usually pay ground rent and/or service charges, which can increase over time. 

What is the Leasehold and Freehold Reform Act 2024? 

In May 2024, the UK Government set out a roadmap for implementing reforms to the current leasehold system called the Leasehold and Freehold Reform Act 2024.  

The Act proposes changes that would give current leaseholders more security and control over their homes. For instance, leaseholders in apartment blocks would have more say in building maintenance and management, and it would be easier for them to query or challenge service charge increases. It would also streamline the process and make it cheaper for current owners of leasehold flats and houses to buy their freehold or extend their lease. 

The UK Government is also proposing a ban on new leasehold homes. In March 2025, it published a White Paper detailing plans to make commonhold the default tenure instead. Commonhold ownership allows people to buy their home outright with no time limit or expiry date on the lease. It also eliminates ground rent and promotes a more democratic approach to building management, giving homeowners more control over budgets and maintenance of communal spaces. 

How will the Leasehold and Freehold Reform Act 2024 affect Shared Ownership? 

Leasehold ownership is the norm for all apartments, regardless of whether you’re buying on the open market or through affordable housing schemes. However, there are some distinctions between different Shared Ownership leases and standard residential leases, so the impact of the reforms will be slightly different depending on the type of property ownership. Below, we’ve outlined how the reforms detailed in the Leasehold and Freehold Reform Act 2024 will impact Shared Ownership leaseholders. 

Lease extension 

Currently, many shared owners can only apply for a lease extension after staircasing to 100%; although, housing providers may have their own policies regarding lease extensions where there is less than 100% ownership. The reform act aims to give all Shared Ownership leaseholders the legal right to extend their lease by 990 years. It will also abolish the two-year ownership requirement to apply for a lease extension. 

Lease enfranchisement 

Lease enfranchisement allows the leaseholder to buy the freehold of the property or extend the lease. Under the proposed plans, Shared Ownership leaseholders will still not have the right to buy the freehold unless they have staircased to 100%. Nor will they be able to club together with other leaseholders to buy the freehold, a process called “collective enfranchisement”.  

Ground rent 

Generally, Shared Ownership leaseholders don’t pay ground rent until they staircase to 100%, but this depends on the terms of the lease. The reform act proposes that Shared Ownership leaseholders with at least 150 years left on their lease can extend the lease by 990 years at a “peppercorn” ground rent. This means the ground rent would be a nominal amount, possibly as low as £1 annually (or even £0). Ground rent was banned on new leaseholds from June 30th 2022, so this new legislation will only apply to Shared Ownership homes bought before this date. 

Regardless of when the property was bought, shared owners who haven’t staircased to 100% will still pay rent on the share they don’t own, as outlined in their lease. 

When will the reforms come into effect? 

While the Leasehold and Freehold Reform Act 2024 has already become law, there is still more work to be done before it comes into effect, as many of its provisions require further consultation and secondary legislation. A Judicial Review hearing has also taken place in July 2025 for freeholders to challenge the reforms and the impact they may have on their income streams. 

The UK Government has previously expressed its commitment to implement the Leasehold and Freehold Reform Act 2024 “as quickly as possible”. A draft Leasehold and Commonhold Reform Bill, which will detail how the commonhold ownership model will work, is due to be published in the second half of 2025. More information is available on the UK Government’s website. 

At Share to Buy, we make your choice easier with a selection of new-build homes across England, available through alternative homeownership schemes such as Shared Ownership. Get your home-buying journey underway using our property portal.