The long-standing leasehold system for UK flats and apartments is coming under increased scrutiny and the alternative model of Commonhold is now back in the spotlight.
In this article we will explore what commonhold is, why it is back in conversation, how any changes may roll out. Most importantly, we will discuss what it could mean for your block of flats.
What is Commonhold?
Commonhold is a form of property ownership for multi-occupancy buildings, introduced in England and Wales by the Commonhold and Leasehold Reform Act 2002.
Unlike leasehold ownership (where leaseholders own the right to live in their units for the length of their lease), Commonhold ownerships allows each resident to own the freehold of their individual unit. This removes any necessity for ground rent as there is no landlord or overall freeholder to pay.
Owners also become a member of a company (a “commonhold association”) that owns and manages the shared areas of the building for a collective approach to management. The rights and obligations of the unit-owners and the association are set out in a document called the Commonhold Community Statement.
In short, commonhold gives flat owners a freehold interest in their unit, combined with a shared association that oversees the building’s communal areas. That combination of ownership and joint management is what defines it.
Why is Commonhold Being Discussed Again?
Although the concept has been around since 2002, uptake of commonhold has been extremely limited. Reasons cited include legal, cultural and market conditions. The leasehold system is deeply embedded, lenders and developers are often unfamiliar with commonhold and many existing blocks already operate under leasehold.
However, leasehold is now subject to increasing public and political criticism. Long leases, service charges that to many seem excessive, the declining value of leases as the term shortens, and limited control by flat owners over the building’s management are all reasons for a shift in direction.
In response, the government has published its Commonhold White Paper in March 2025. It sets out a vision that replaces leasehold with commonhold as the default tenure for new flats. Interest has been piqued due to the possibility of leaving the perceived unfairness of the leasehold system behind.
What Could Change and When?
One headline from the White Paper is that the government intends for new-build flat developments to be offered on a commonhold basis rather than on long leases.
This means that going forward, if you are buying a brand new flat, the default structure may be commonhold rather than leasehold. For blocks already under leasehold, the picture is more complex.
Adoption is expected to be incremental – the White Paper stresses that while commonhold should become the default for new flat developments, it does not mean immediate abolition of leasehold for all existing properties.
One of the blockages to commonhold uptake has been unfamiliarity for mortgage lenders and legal conveyancers. The White Paper also emphasises the need to give lenders clarity and comfort to smooth the way for commonhold uptake to increase.
What This Means for Your Block of Flats
If you are a flat-owner or are managing a block, here is what commonhold adoption could mean for you and your neighbours:
- Ownership and control: Your unit’s value will not decrease in line with a waning lease, and commonhold associations give owners a collective voice in management decisions.
- Shared responsibility for common parts: Owners jointly bear responsibility for the upkeep and running of the building via contributions to the association’s budget (sometimes called a commonhold assessment). This replaces service charges under a lease.
Transition considerations for existing leasehold blocks include:
- Assessing whether conversion to commonhold is feasible (legal, cost, unanimous/majority ownership issues)
- Engaging with the freeholder and all leaseholders about transition terms
- Mortgage lenders and conveyancers may need to sign off new commonhold titles.
Potential Pitfalls
Leasehold buildings converting to a commonhold system need to be wary of the governance structure: the Commonhold Community Statement needs to be well drafted, transparent and accessible. Weak governance could lead to problems in maintenance or budgeting.
Even under commonhold, a managing agent can be engaged. The difference is that owners control the appointment and oversight. Choosing a suitable agent will need to be a careful, group decision.
Under leasehold, many leaseholders resent seemingly huge service charge bills. Be aware that, under commonhold, you still pay for communal works, but within this system you will have a direct say in them.
If mortgages are harder to secure for commonhold units (because lenders are unfamiliar) marketability could be affected (though the proposed reforms aim to address this).
Why Phased Adoption is Key
The shift from leasehold to commonhold is a substantial change. The government recognises that the move will need to be phased for multiple reasons:
- Developers need certainty, and existing stock is already under leasehold. You cannot simply convert every lease in one go without legal and practical issues.
- Lenders need proven mechanisms to feel comfortable lending against commonhold properties.
- Transitioning existing blocks involves coordination among all owners and the freeholder.
- Conveyancers, property managers and the wider property sector need training and familiarity with the new model.
Final Thoughts
Commonhold offers a compelling alternative to leasehold for blocks of flats. It gives flat-owners freehold-style ownership of their units plus shared control of the building through a democratically governed association. It ends the ticking-down of a lease term and gives owners more say.
However, the system is not yet widely used, and its broader adoption depends on law reform, lender confidence, developer adoption and a practical transition path from existing leasehold buildings.
Now is a good time to familiarise yourself with commonhold. Understand how it works, its benefits and how your block might be affected as the reform journey unfolds. For blocks currently under leasehold, keep an eye on the evolving legislation and consider whether conversion or setting a path for future change may be beneficial.
