The change will mean that any leaseholder who chooses to extend their lease on their home will no longer pay any ground rent to the freeholder.
A cap will also be introduced on ground rent payable when a leaseholder chooses to either extend their lease or become the freeholder.
An online calculator will be launched to make it simpler for leaseholders to find out how much it will cost them to buy their freehold or extend their lease.
According to the government, today's changes could save some leaseholders thousands, to tens of thousands of pounds.
Under the current law, leaseholders of houses can only extend their lease once for 50 years with a ground rent.
This compares to leaseholders of flats who can extend as often as they wish at a zero ‘peppercorn’ ground rent for 90 years.
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“Across the country, people are struggling to realise the dream of owning their own home, but find the reality of being a leaseholder far too bureaucratic, burdensome and expensive,” said Jenrick.
“We want to reinforce the security that home ownership brings by changing forever the way we own homes and end some of the worst practices faced by homeowners.
“These reforms provide fairness for 4.5 million leaseholders and chart a course to a new system altogether.”
The government will also establish a Commonhold Council — a partnership of leasehold groups, industry and government — that will prepare homeowners and the market for the widespread take-up of commonhold.
Professor Nick Hopkins, commissioner for property law at the Law Commission, said: “We are pleased to see the government taking its first decisive step towards the implementation of the Law Commission’s recommendations to make enfranchisement cheaper and simpler.
“The creation of the Commonhold Council should help to reinvigorate the commonhold, ensuring homeowners will be able to call their homes their own.”