The UK government has published its House of Lords Reform Bill, designed to shift the archaic House of Lords to an 80% elected chamber over the course of three elections. This is a slight improvement over the current situation of a 100% unelected chamber - but not much of one. Firstly, while elected, the term of ~15 years means that members of the new house will be completely unaccountable to voters. Secondly, 20% of them, plus the bigot Bishops, will still be unelected, appointed by a "neutral" appointments commission (who will stack it with the donors and cronies of the government of the day). Finally, the government will be able to appoint people to the Lords to be Ministers - meaning Ministers who are unelected and absolutely unaccountable to the people.
As with the Alternative Vote, this isn't enough to interest anyone who wants real democratic reform, while being far too much for conservatives. The reforms are thus destined to fail.
As for what should happen, I think we should start by asking what purpose the Lords serves in the modern UK. And the answer is "none". The idea of privileged representation for the aristocracy and their cronies is intolerable to a democracy. It has no place in a modern democracy. As for alternative upper houses, they have no place either. Who would they represent? While devolution has moved the UK away from being a purely unitary state, they're not yet federal, and there's not really a need for regional representation separate from the population-based Commons. And in any case the English are unlikely to admit that the Welsh, Scottish and Northern Irish (oh, and the tax-cheats of Jersey and Guernsey) are equal partners in their state and thus deserving of an equal voice in an upper house.
Elected or otherwise, an upper house simply serves no purpose in the modern UK. Which means there is only one "reform" worth doing: abolition.