Mairead McErlean is Head of Legal, Compliance and Regulatory Affairs at FirstPort
The future of commonhold depends on more than legal reform. The expectations, understanding and engagement of those living in owner-managed buildings will determine whether the model succeeds in practice.
The government’s draft Commonhold and Leasehold Reform Bill, published in January 2026, is designed to reinvigorate commonhold and make it the default tenure for new flats. The Housing, Communities and Local Government Committee is currently scrutinising the proposals before legislation is formally introduced, while the government is also consulting on banning new leasehold flats.
The direction of travel is clear. Commonhold is no longer a theoretical alternative to leasehold. It is being positioned as part of the future of home ownership in England and Wales.
But commonhold brings greater responsibility alongside greater control. Success will depend on residents’ willingness to build the trust, accountability and collaboration essential to collective ownership. Clear communication, transparent governance, strong managing agent relationships and realistic expectations will all be vital.
The biggest weakness in any collective ownership model is not always bad faith. Often, it is misunderstanding. People do not always know what they have bought, what they are responsible for, why they contribute towards shared costs, or how decisions are made.
I recently spoke with Peter Scott, a director of a resident-owned freehold company in Kensington, which operates in a similar way to the commonhold system being proposed by government. In his building, owner engagement is structured through a board, an owners’ committee and a long-term maintenance plan, supported by a professional managing agent who helps ensure accountability.
This model works because of strong governance and active owner participation. This has been achieved as a result of the members creating bespoke articles of association for their freehold company. These are set rules which include an owners’ committee as part of the management structure. The owners’ committee provides an informal way for owners to share feedback, discuss ideas and pass concerns to the board. It allows active participation from owners who may not have the time or inclination to take on formal board roles. These practical insights are important when considering how commonhold can realistically be implemented across future developments.
We would like the government to consider implementing more flexible corporate governance arrangements for commonhold associations through secondary legislation. These arrangements should reflect how commercial businesses are run and they must meet the expectations of people living in a busy and fast-paced society. For example, a simple change to the standard articles of association to allow meetings to be held virtually and votes to be collected via an online platform would make participation possible for owners who are unable to physically attend meetings.
The idea that resident control automatically creates harmony is overly simplistic. Commonhold has existed since 2002, yet uptake has remained limited. The current reform programme aims to address this by modernising the legal framework, improving lender confidence and making conversion easier in some circumstances.
The draft bill and accompanying guidance explain that commonhold was originally intended to solve a longstanding problem in English and Welsh property law: how to allow freehold-style ownership of flats while still enforcing the obligations needed to manage shared buildings and communal spaces.
For this model to work effectively, there must also be proper support structures in place for those responsible for running commonhold associations.
Education will be critical. Residents must understand where their responsibilities lie, how service charges are spent and how decisions are made. Removing the ambiguity associated with traditional leases will only work if buyers engage with the system and professionals can explain it clearly.
There must also be proportionate support for Resident Directors. Volunteer governance can be daunting, particularly when it involves compliance, budgeting and risk management. Access to training and practical guidance will be essential if volunteer Directors are to manage buildings effectively.
There is also an important distinction between owner-led and self-managed. In many developments, professional management will remain essential. A good managing agent can oversee the operational and regulatory requirements, but owners still need to stay engaged, ask questions and make informed decisions.
We are not starting from a neutral position. There are millions of leasehold homes across England and Wales, and the government itself acknowledges the scale of the existing market. Transitioning towards commonhold for future development will take time.
Ultimately, the question is not simply whether commonhold is better than leasehold. The real test is whether buildings and their owners are equipped to support the habits that make collective ownership work: clarity, accountability, participation, transparency and a willingness to balance individual preference with shared responsibility.
The draft reforms aim to improve on the ambiguity of traditional leases through a more standardised commonhold framework. But outcomes will only ever be as strong as the people responsible for making the system work in practice.
