Residential property: Common ground | Law Gazette

‘They tried it before,’ Russell Cooke partner Donall Murphy noted at a Gazette roundtable discussion in October. ‘I remember a colleague became the specialist in commonhold.’ That was 2002, and the decision to specialise proved premature. Now it may be about to pay off. A government white paper, published on 3 March, places commonhold front and centre of ‘a radical improvement on leasehold ownership’.

As the country follows (to whatever degree) Sir Keir Starmer’s instruction to ‘build baby build’, new leasehold flats are to be banned and commonhold will become the ‘default tenure’. Under the government’s plans, it is not just new-build properties that are affected. A ‘comprehensive new legal framework for commonhold’ will be introduced, making it simpler for existing leaseholders to convert their properties.

Properties governed by commonhold will be required to hold mandatory reserve funds, public liability insurance and stronger rules for appointing directors and managing agents. The government has committed to a Commonhold Reform Bill, to be published later this year. This will ‘give homeowners a stake in ownership of their buildings’, without the burden of ground rent, and hand them ‘power, control and security over their homes’.

There are clear arguments for reform, but if the proposals become law, progress will come up against the lack of expertise Murphy highlighted last year. Cordelia Smith, associate at London firm Hunters, questions ‘how carefully the logistics of the proposed changes’ have been considered.

‘There is a real lack of public knowledge about commonhold, and many conveyancing solicitors will rarely, if ever, have encountered it in practice,’ Smith says. ‘Leasehold is imperfect, but leaseholders are at least more or less familiar with their rights and responsibilities.’

A lack of commonhold experience holds across the property sector. Smith says any change to commonhold will ‘require significant input from mortgage lenders’. Halifax, she notes, ‘currently has a blanket ban on lending on commonhold properties for any new mortgage’.

Commonhold is ‘a system barely used since its introduction in 2002, largely because it was drafted for a world that doesn’t exist anymore’, says Charlie Davidson, senior associate at London firm Bishop & Sewell. ‘If the government tries to force commonhold conversions or requires new builds to adopt the model overnight, expect confusion, lender hesitancy and a learning curve steeper than Everest.’

Davidson asks if the government has chosen the right target to improve the lot of leaseholders: ‘The reality is that leasehold, while flawed, has functioned for centuries. The biggest problem isn’t the structure itself but mismanagement. If reform focused on tackling bad freeholders, improving transparency, and strengthening rights for leaseholders, we’d be having a very different conversation.’

Not all property lawyers respond negatively to the prospect of reform. Murphy’s colleague, partner Shabnam Ali-Khan, says: ‘Commonhold will give leaseholders control over the management of their buildings and do away with leases. There will be provisions to give more confidence to lenders too. These moves are heading in the right direction for many unhappy leaseholders.’

But in common with her peers, Ali-Khan has concerns about the capacity of property lawyers to handle the demand leasehold reform will generate: ‘With almost five million leasehold homes, the reality of a move away from leasehold is far off.’

Commonhold reforms follow on from the Leasehold and Freehold Reform Act (LFRA), passed by the previous government in 2024 with cross-party support. Secondary legislation establishing a right to manage came into force on 3 March. In January, the government announced that the ‘two-year rule’ for leasehold extensions and enfranchisement was abolished, meaning that the purchaser of a leasehold can apply for a lease extension straight away.

And there is more to come. One aim of the legislation, which is not yet in force, is to make it cheaper to extend leases below 80 years, or ones with a high ground rent above 0.1% of the value of a property. Much of the detail, however, is yet to be confirmed.

Further consultation is expected this year on protection against ‘unscrupulous managing agents’ and to challenge unreasonable service charges costs, among other measures. Lawyers have criticised how the reforms have been introduced.

‘Clients are, understandably, looking for certainty,’ Smith says. ‘The piecemeal way the LFRA is being brought into effect does not always allow conveyancers to offer certainty… This is particularly noticeable in relation to the costs of lease extensions.’

Overstretch

Insufficient capacity is an issue across the board for residential property lawyers. Margins in an increasingly competitive market are slim, but volumes are high and continue to rise. In England and Wales, 2024 saw a 17% increase in transactions, with 1.24m sales agreed, according to HM Revenue & Customs data. Analysts are predicting an even busier 2025, partly to beat April’s increase in stamp duty.

The UK Residential Conveyancing Market Report 2025 by market intelligence company IRN Research shows a 9.8% fall in the number of law firms active in conveyancing in England and Wales from 2021 to 2025.

Land Registry transaction data, meanwhile, confirms that large national practices such as Taylor Rose, My Home Move and Davisons Solicitors increasingly dominate the landscape.

‘When you have so much pressure to achieve someone’s dream for them, it becomes very hard. I average 200 emails a day, many of which are chasing me for an update’

Sarah Dwight, sole practitioner

The IRN report notes that ‘conveyancing legal services have been hit by weaker margins on individual transactions, competition to get on conveyancing panels, and shortages of qualified conveyancers’. That shortage inevitably causes problems as demand rises.

Recruitment and retention remain an ongoing issue. ‘People are leaving the profession because of stress,’ says sole practitioner Sarah Dwight, a member of the Law Society Conveyancing and Land Law Committee. ‘When you have so much pressure to achieve someone’s dream for them, it becomes very hard. I average 200 emails a day, many of which are chasing me for an update. I am firefighting all day.’

The Conveyancing Foundation 2024 Wellbeing at Work Survey found that 47% of respondents suffered from excess stress in their role, while 14% said that workplace stress is a ‘constant factor’.

‘Quite frankly,’ notes Davidson, ‘we haven’t seen this mass exodus from the profession in a long time. The problem is that we are getting more and more stuff foisted on us, with people getting more and more frustrated. It’s perceived as a consumer service, but we are still held to a very high professional standard.’

SDLT ‘frenzy’

Stamp duty rates are due to change on 1 April 2025, when the threshold increase introduced in September 2022 ends.

The change will likely have the biggest impact on first-time buyers, with the nil-rate threshold, currently £425,000, returning to £300,000. Similarly, the maximum purchase price for which first-time buyers’ relief can be claimed is returning to £500,000 from £625,000.

Last month, property portal Rightmove estimated that 74,000 properties could miss out on SDLT reliefs and called for an extension to the deadline. It predicted a ‘conveyancing log-jam as movers rush to complete’.

However, Zahrah Aullybocus, partner at Shropshire firm Nexa Law, believes that extending the deadline is ‘just kicking the can down the road. We will still be under the same pressure whether it’s now or in three months’.

Some 25,000 first-time buyers are predicted to miss the SDLT deadline. Nathan Emerson is CEO of Propertymark, the professional body for estate and letting agents. He notes: ‘Many first-time buyers will be disheartened by the fact that they will have to pay, in some cases, thousands of pounds extra to complete their house purchase from April, especially as many delays will have been out of the buyers’ control due to issues presented in the property chain.’

Dwight explains that the stamp duty break only increased pressure on conveyancers: ‘Just this week, I have had people ring up and say “We’ll pay you extra if you can get us in for the end of the stamp duty break”.’ Most firms, she notes, would say ‘no, we are not even going to take that on’.

Digitisation

Successive governments have promised to digitise the conveyancing process. There was a feeling of deja vu when the Ministry of Housing, Communities and Local Government (MHCLG) last month announced major plans to ‘modernise home buying and selling to save people time and money’. It blamed current delays, estimated at five months, on a ‘lack of digitalisation and join-up in the sector’.

The government plans to open up key property information so data can be shared between professionals, as well as ‘driving forward plans for digital identity services’.

Building control and highways information remain predominantly paper-based. Where this information is available electronically, there are no established protocols for accessing, sharing or verifying this data, MHCLG notes. Transferring to a fully digitised home-buying process will put key information (from mortgage companies to surveyors) ‘within easy reach immediately’. A 12-week project has begun to establish ‘agreed rules’ for the sector.

The project is being conducted with the Digital Property Market Steering Group, a collection of industry and government experts committed to digitising the process, supported by HM Land Registry.

The reforms have received Law Society support. Vice president Mark Evans notes that while the proposals are ‘not a silver bullet, because there are many aspects of the home moving process that need improvement, digitalisation could be transformative… over time’.

Propertymark has also welcomed the proposals. Emerson notes that the commitment ‘will ultimately bring vast consumer value and help streamline systems that have long needed progression’.

Yanthé Richardson, conveyancing specialist and principal director at Foot Anstey in Taunton, has contributed to various consultations on digitisation and also sits on the Land Registry Advisory Council. ‘This will speed up the consumer experience,’ she says. ‘It is the consumer that we must have in mind because it is probably the area of law that most people will have to deal with at some point in their lives.’

Some practitioners, however, remain sceptical, warning that plans lack detail and could lead to an increase in cybercrime.

‘We want to see the evidence on how it’s going to help us do our jobs better,’ says Aullybocus. ‘It’s not that we are against it. I’m the first to pick up any tool that’s going to help me to do my job better.

‘Digitisation comes following complaints from estate agents that too many people are pulling out of transactions. The trouble is there are so many legal issues that can arise. Putting things into pretty little packages isn’t going to work. Unfortunately, the people championing such changes are not frontline conveyancers. Estate agents blame us for causing delays, but they have little to no understanding of what’s going on underneath the surface.’

Aullybocus argues that if technology is to work as anticipated, it needs to be under the control of lawyers, ‘so that it is used as a tool and not a replacement. Property lawyers face cyber-attacks on a daily basis. We haven’t been told how, when and who will be liable for fraud, IT breakdowns and so on’.

Stephen Larcombe is chair of the Property Lawyers Alliance, which last year played a role in forcing the Law Society to call a special general meeting in the wake of the updated fifth edition of the Property Information Protocol Form (TA6) (see box). He argues: ‘Digitisation would only scratch the surface of the real issues blocking conveyancing, such as the massive amounts of anti-money laundering red tape wholly unjustified by the evidence, and payment of referral fees encouraging the growth of conveyancing factories. Property lawyers face multiple challenges and are leaving the sector in ever greater numbers.’

Richardson, however, argues that digitisation will reduce risk: ‘I understand that there are concerns around safety, but there is an element of reduced risk with data, and the risks attached to double entry of data by conveyancers, when they have to enter information into a case management system, for example. If some of this data could be shared, along with an increase in speed, we would also probably see a reduction in risk.’

She acknowledges that there is potential for small firms to be penalised in the move to digitisation. ‘Small firms need the expertise to know what they are looking at when trying to decide on a tech partner,’ she says. ‘So there is a definite commercial implication. If those firms can’t afford digitisation or aren’t prepared for it, that’s not a good thing. I recognise that, as a larger firm, we can do this, and I have great data teams and experts behind me. The whole market doesn’t have that and that’s what the government has to be really careful of.’

Lisa Gibbs, partner at HCR Law in Cardiff, also believes most conveyancing lawyers would welcome steps towards streamlining the process through digitisation.

‘Practitioners currently have to access data in various forms from various organisations during the conveyancing process – this is time-consuming and inefficient,’ Gibbs notes. ‘For example, conveyancers have to obtain information from local authorities, the Land Registry, lender portals and managing agents – all via separate portals/manual systems. The recent development of lender portals has significantly assisted in making the conveyancer/lender relationship more efficient and is a good example of progress in the sector.’

Camilla Tunnicliffe, a knowledge lawyer at London firm Farrer & Co, says that while digitisation is the way forward, given the pressure on the Land Registry, it is hard to envisage that it will happen quickly. ‘They are still trying hard to clear the backlog of applications, and their input will definitely be required in the digitisation process,’ she says. ‘It will be exciting when we get there, but I’m not sure how soon that will be.’

The exodus of conveyancers is partly to blame for backlogs, say practitioners. The IRN 2025 report notes that the number of solicitors practising in residential property has dropped by 15% since 2021.

‘The skilled people have left,’ says Davidson. ‘They have been replaced by junior staff. They have been given a script and they don’t really understand what they are doing and why they are doing it.’

A lack of experience in the sector is a major issue, acknowledges Richardson. ‘Experienced conveyancers are hard to find. Also, it’s not an area that graduates are attracted to. However, to concentrate on that and not embrace digitisation at the same time would be a mistake. We need to be looking at how we can make this work for us, alongside other things that need to improve.’

Maria Shahid is a freelance journalist