King’s Speech

Baroness Shah Excerpts

Wednesday 20th May 2026 Lords Chamber

[Baroness Shah (Lab)]

My Lords, I will speak about an issue that millions of our fellow citizens suffer under a system that exists not by accident but by design. Housing, His Majesty told us, is

“a source of insecurity for many people”.

That is perhaps the most restrained description of the leasehold system one could offer in this House. Some 91% of owner-occupied flats in England are leasehold. In total, one in five properties—nearly 5 million homes—is leasehold. These are not fringe numbers; they represent the daily lived experience of millions who do not truly own their home, and so it is right that it was included in the gracious Speech.

Before I turn to the scandal of what leasehold has become, I want to say something about building homes in the first place. This is a matter of which I have direct experience. As a cabinet member for regeneration for eight years in Brent, I know what it takes to bring homes forward at scale. Building homes is not a technocratic ambition; it is a moral one. The Government’s commitment to build 1.5 million homes in this Parliament is right and necessary. But here is a truth that experience teaches: it is not enough simply to build homes; we must ask what kinds of homes they will be and on what terms people will hold them. We must ensure that the homes we build do not become the instruments of a new injustice. That is precisely where the leasehold system bites hardest.

The majority of new homes delivered at scale will be flats—that is the arithmetic of housebuilding. If they are sold as leasehold, as has been the default for generations, every new home that we build is a potential new entrant to a system of tenure that is unjust. We cannot build our way to a fairer housing market while maintaining an unfair tenure at its heart.

It is young people who bear the sharpest cost of both failures. For a generation of young people, the aspiration of home ownership is not being deferred; it is being extinguished. The Institute for Fiscal Studies found that home ownership among 25 to 34 year-olds stood at 55% in 1997. By 2017, it had collapsed to just 35%. Since 2005, home ownership rates have fallen for every age group except those aged 65 and over, whose rate has risen by 7%. We are building a country in which housing wealth accumulates with age and inheritance, not with work and aspiration. That is an intergenerational injustice.

When these young people finally reach the property ladder, often through a flat, which is often their only realistic option, they find themselves met not with security but with ground rent, service charges and a tenure that gives the cost of ownership without the control. The Government estimate that more than £600 million was paid by leaseholders in ground rents in 2025 alone. For a young person already stretched across a 30-plus year mortgage and a huge deposit, that is not a minor inconvenience; it is further extraction from those who can afford it least. The Government’s manifesto committed to bringing the feudal leasehold system to an end. This is structural reform of a system that has for generations denied working people the full fruits of home ownership. The Bill will cap ground rents, ban leasehold for new flats and make commonhold the default.

On commonhold, the Bill is at its most radical and most just. Flat owners will hold their rents as freeholders, managing their building collectively as equals, with no absentee overlord and no arbitrary charges approved without scrutiny. As the chief executive of the Property Institute has observed, this model already operates in most countries across the world, including Scotland. The Government are proposing not revolution but joining the rest of the civilised property-owning world. Some 5 million leaseholders across England and Wales are waiting for this legislation, and the Government have an electoral mandate to act.

I shall add only one note of caution. The Property Institute is right that empowered commonholders must be supported by qualified professional property managers and that resident empowerment must not outpace protections against an unregulated sector. This House will rightly scrutinise the safeguards with care. Let us be clear what this moment represents. The Government are committed to dismantling this archaic and iniquitous system, not overnight, not recklessly, but decisively and for good. For every young person currently saving for a deposit they fear will never be enough, for every leaseholder paying rent on land that they thought had been bought, and for every family in a new-build flat discovering that the tenure that was sold does not deliver the security they were promised, this Bill will matter. Building more homes is essential, but building them fairly is non-negotiable.