The leasehold system is blighting millions of lives. The leasehold system is a barrier to a fair and efficient modern residential property market. The leasehold system is an anachronism in the 21st century. That is why this Government made a clear and unambiguous commitment in their manifesto to act where previous Governments had failed and finally bring it to an end.
To bring the feudal leasehold system to an orderly end in this Parliament, we must stop it perpetuating itself. To do so, we will legislate through our forthcoming commonhold and leasehold reform Bill to reinvigorate commonhold through the introduction of a comprehensive new legal framework and make it the default tenure by banning the use of leasehold for new flats—complementing the ban on new leasehold houses already on the statute book.
In the commonhold future that is on the horizon, existing leaseholders will not be left behind. We will put in place measures that enable more existing leaseholders to take control of their buildings and more easily convert to commonhold as and when they judge the time is right for them. And we will continue to strengthen protections for existing leaseholders in the here and now.
Implementation of the Leasehold and Freehold Reform Act 2024 is an integral part of the Government’s ambitious leasehold and commonhold reform agenda. Bringing the various provisions of the Act into force is essential both to providing immediate relief to existing leaseholders currently suffering as a result of unfair and unreasonable practices and to facilitating a rapid reduction in the prevalence of existing leasehold by enabling leaseholders to convert to commonhold in practice.
The Government have already made significant progress when it comes to commencing provisions in the 2024 Act. On 24 July 2024, we brought into force provisions relating to rent charge arrears, building safety legal costs and the work of professional insolvency practitioners. On 31 October 2024, we brought into force further building safety measures. On 31 January 2025, we commenced provisions to remove the two-year qualifying rule in relation to enfranchisement and lease extensions. And on 3 March 2025, right to manage provisions (expanding access, reforming its costs, and voting rights) came into force.
Today, I am setting out details of the next phase of the 2024 Act’s implementation.
Leasehold enfranchisement: valuation rates and non-litigation (process) costs
Our forthcoming commonhold and leasehold reform Bill will include a new and improved process for commonhold conversion, one which brings it into line with wider enfranchisement processes and will make conversion possible if at least 50% of qualifying leaseholders agree.
However, to ensure more leaseholders are able to convert in practice, we need to implement measures in the 2024 Act that will make it easier and cheaper for leaseholders to extend their lease or buy their freehold (known as “enfranchisement”), as well as implement mandatory leasebacks, address development value as a barrier to enfranchisement, and legislate to cap ground rent at £250 which will further reduce the cost of enfranchisement for many leaseholders with ground rent.
At the local government finance settlement on 9 February 2026, the Government confirmed the £5 million internal drainage board levy support grant for the financial year 2026-27. This is a continuation of the grant from 2025-26, reflecting the Government’s recognition of the continued financial pressures special levies place on local authorities.
Today, I am confirming the allocation of this funding to the 17 local authorities most severely impacted by internal drainage board special levies. Councils and internal drainage boards are encouraged to continue working together to deliver services efficiently and ensure good value for money for the public.
Allocations of the £5 million Internal Drainage Board Levy Support Grant for 2026-27
Local Authority
Allocation of Internal Drainage Board Levy Support Grant 2026-27
This Government are committed to taking the action necessary to fix the foundations of local government. Today, I am updating the House on the Government’s action to update the best value guidance, to set clear expectations of the standards local authorities need to meet for their residents. I am also updating the House on the steps we are taking to support individual councils at risk to recover and reform.
Best Value Duty
In March, we published an independent evaluation of our best value interventions, and committed to updating the best value statutory guidance, previously issued in 2024. We are now publishing, for consultation, revised draft guidance that sets out what constitutes best value, the standards expected by Government, and the Government’s approach to supporting local government in delivering real prosperity for their residents and local area.
To achieve best value and meet the standard residents expect, we need strong local institutions that are well led, focused on the long term and committed to a culture of continuous improvement.
The revised guidance sets out this Government’s intention of supporting authorities to secure their own compliance with best value, prevent them from slipping into crisis, and take action to address risks before they escalate. It lays out a new focus on the high standards expected in local government. Where authorities are in crisis, the guidance explains how Government may intervene to get them back on their feet.
Following the closure of the consultation on 7 October 2026, Ministers will update the House when the Government publish the final statutory guidance.
We have been constrained from implementing the 2024 Act’s enfranchisement measures to date by the fact that legislation contains a small number of specific flaws. These include a loophole in the new valuation process which means that some people could avoid paying the correct price for their lease extension or freehold acquisition, thereby compromising the integrity of the amended method, and an omission that would deny tens of thousands of shared ownership leaseholders the right to extend their lease with their direct landlord, given that the providers in question do not have sufficiently long leases to grant 990-year extensions. The King’s Speech 2026 confirmed that fixes to these flaws will be included in the forthcoming commonhold and leasehold reform Bill.
To ensure that we can commence the 2024 Act’s enfranchisement provisions as soon as possible following Royal Assent of the commonhold and leasehold reform Bill, the Government need to have determined the prescribed rates that will be used to calculate the enfranchisement premium and to have confirmed their approach to the recovery of non-litigation (process) costs. To inform final decisions in respect of both matters, we are today launching two technical consultations.
The first consultation, which can be found at https://www.gov.uk/government/consultations/leasehold-enfranchisement-valuation-rates, concerns valuation rates. The new method for calculating the price of a statutory lease extension or freehold acquisition provided for by the 2024 Act removes the requirement for marriage value to be paid, caps the treatment of ground rents in the valuation calculation at 0.1% of the freehold value, and allows Government to prescribe through secondary legislation the two rates used to calculate the enfranchisement premium.
Within the parameters defined by the 2024 Act, the consultation seeks evidence and views to inform the setting of both the deferment and the capitalisation rates. Our aim is to set rates that reasonably find the present value of the “reversion” and “term” elements of the premium while providing simplicity, certainty and stability for those involved in enfranchisement claims.
The second consultation, which can be found at https://www.gov.uk/government/consultations/leasehold-enfranchisement-process-costs, concerns non-litigation (process) costs. At present, leaseholders are forced to pay their landlords’ process costs when extending their lease or buying their freehold. The 2024 Act ends the recovery of non-litigation costs by landlords with a small number of exceptions, as recommended by the Law Commission, to account for low-value claims, failed claims and where there are leaseback arrangements in place.
The consultation seeks evidence and views on the amount of the landlords’ process costs that should be payable by leaseholders where one of the exceptions in the 2024 Act applies and also on the merits of a new exemption (subject to future legislation) designed to support resident-led management organisations, and possibly some other organisations, which might otherwise be unable to fund the costs associated with an enfranchisement claim.
Both consultations will run for 10 weeks. While each is technically complex and demands a degree of specialist knowledge, we strongly encourage input from all parties affected, including individual leaseholders and freeholders, so that the Government’s final decisions on valuation rates and non-litigation (process) costs are informed by views beyond simply enfranchisement professionals.
I want to reiterate that no amount of litigation will deter the Government from progressing their ambitious leasehold and commonhold reform agenda. We robustly defended the challenges brought to the enfranchisement provisions of the 2024 Act last year and warmly welcomed the High Court’s judgment which comprehensively dismissed them. We will defend any appeals just as tenaciously.
Regulation of leasehold: service charges, litigation costs and insurance costs
The forthcoming commonhold and leasehold reform Bill will contain a number of provisions that provide existing leaseholders with greater rights, powers and protections over their homes, not least the abolition of leasehold forfeiture and its replacement with a modern, proportionate lease enforcement system that addresses breaches fairly, with appropriate safeguards and judicial oversight. However, providing urgent relief to existing leaseholders struggling with the cost of living requires us to switch on a number of remaining measures from the 2024 Act.
The “Strengthening leaseholder protections over charges and services” consultation undertaken last year sought views on measures contained in the 2024 Act to drive up the transparency of service charges and reform the litigation costs regime, as well as a number of further reforms outside the scope of that Act including mandating reserve funds, introducing mandatory qualifications for managing agents and improving the section 20 major works regime. We received a very large number of thoughtful and detailed responses to it from leaseholders, landlords, managing agents and representative organisations. The insight provided has been invaluable in shaping our approach.
That response confirms that the Government will now proceed to implement measures to drive up the transparency of service charges, including standardised service charge demand forms, an annual report and enhanced leaseholder rights to obtain information on request, and reform the litigation costs regime by requiring court or tribunal approval for the recovery of litigation costs through the service charge and giving leaseholders a new right to enable them to recover landlord costs in certain circumstances. We will also look to introduce a transparent and fair permitted building insurance payment. These measures will work in tandem to help leaseholders better understand what they are paying for and empower them to challenge charges where they believe them to be unreasonable.
This impactful package of reforms will be laid in Parliament later this year through a minimum of five complementary statutory instruments, at least two of which will be made under the affirmative procedure. We will provide a separate response in due course in relation to the further reforms consulted upon that are outside the scope of the 2024 Act, including those that concern the regulation of managing agents.
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Best Value Notices
I am also updating the House on the use of best value notices as a lever to secure improvement in several councils. Best value notices are not a form of statutory intervention, but provide a formal notification that Ministers have concerns about risks to compliance with the best value duty. They request that each council engages with the Department to provide assurance of improvement at pace against a set of expectations to avoid future failure.
Three councils had notices issued in 2025 that are due for review. Following significant improvements in Dudley metropolitan council, the notice there will be lifted on 16 July. The Department will continue to work with the council and its partners to ensure improvement is sustained and cultural change is embedded. Progress has also been made at the London borough of Newham. However, there is further work for the changing political and officer leadership team to deliver and embed planned improvements, and the Department has issued a revised notice, to be reviewed after six months. I remain very concerned about the scale of challenge at Cheshire East council, and the Department has issued a revised notice, to be reviewed after six months. I expect the council to significantly increase the pace of improvement, driven by a stable leadership team and supported by the Department and the Local Government Association.
The Department has also issued four new best value notices. In the London borough of Hillingdon, Shropshire council and Somerset council, my concerns relate to financial sustainability, as evidenced by prolonged and forecasted reliance on exceptional financial support, alongside broader issues including with financial management, governance and capacity. In Basildon borough council, my concerns relate to serious cultural and governance issues. To build the evidence base for improvement, I will also commission an independent external assurance review into Basildon, which will report its findings by the end of October 2026.
Woking and Spelthorne
Following consideration of local representations, I have established a single commissioner team to operate across both Woking and Spelthorne borough councils. This creates a single, cross-cutting team that will focus on embedding council improvements and strengthening the grip on the complex challenges that remain as the councils approach West Surrey’s vesting day in April 2027. The team is led by Lesley Seary, supported by Barry Scarr, Deborah McLaughlin and Mervyn Greer.
As part of these changes, Sir Tony Redmond and Peter Robinson have stepped down from their commissioner roles. Richard Carr will also transition from his managing director commissioner role, and will continue playing an important part in supporting Woking borough council's improvement and transition towards local government reorganisation as its interim chief executive. I would like to place on record my sincere thanks to all three commissioners for their significant contributions.
I have also received the latest commissioner reports for both councils and published them, together with my formal responses, on gov.uk.
Thurrock
On 27 January 2026, I announced that I was content for Thurrock council to initiate a recruitment process for a chief executive. I understand that the recruitment process is on schedule, with an appointment due to be recommended to full council later this month. As Parliament will be in recess at that time, and having considered local representations, I am announcing today that if the council successfully appoints a chief executive, and the managing director commissioner subsequently steps away from their role, I will appoint a commissioner with responsibility for transformation in due course. This will ensure that there continues to be three commissioners in place in Thurrock to provide the necessary oversight, challenge and support as the council moves into the next phase of its intervention and recovery.
Slough
Following the managing director commissioner setting out his plans to step down at Slough borough council over the summer period, and having considered local representations, I am today announcing that I will appoint a replacement managing director commissioner with the expertise and leadership needed to address the scale of its ongoing challenges. Given that Dr Dave Smith’s role will end at Thurrock with the appointment of a chief executive, I am announcing that he will be appointed as managing director commissioner at Slough borough council.
I would like to take this opportunity extend my sincere thanks for all the work Will Tuckley has done as managing director commissioner for the intervention at Slough borough council.
Nottingham
In March, I announced the de-escalation of the statutory intervention at Nottingham city council and committed to appointing a second ministerial envoy. I am today appointing Sir Stephen Houghton CBE as political envoy in Nottingham to provide support and guidance to the council leadership to help build further on the improvements already under way.
Conclusion
I am committed to ensuring that the standards expected of local government are clear, and to working with these councils to ensure their compliance with the best value duty. I will deposit in the Library of the House copies of the documents referred to, which are being published on gov.uk today. Ministers will update the House in due course.