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The End of Leasehold? Commonhold’s Growing Role in UK Housing

02 June 2025

For decades, leasehold ownership has been the standard for flats and shared buildings in England and Wales. However, this model has increasingly come under scrutiny due to rising costs, limited control for leaseholders, and complex legal structures.

In response, a growing number of legal experts, policymakers, and consumer advocates are turning their attention to an alternative: commonhold ownership.

This blog explores what commonhold ownership is, why it's gaining traction, and how it could reshape the future of property ownership in the UK.

What is Commonhold Ownership?

Commonhold is a relatively new form of property ownership, introduced in England and Wales in 2002 through the Commonhold and Leasehold Reform Act. It allows for the freehold ownership of individual flats, alongside shared ownership and responsibility for common parts of the building (e.g., hallways, roofs, gardens).

Unlike leasehold, which grants time-limited rights to occupy a property (often with escalating ground rents and service charges), commonhold gives owners permanent ownership of their unit. All unit owners automatically become members of a Commonhold Association, which manages the building collectively and democratically.

The Problems with Leasehold

Leasehold has long been criticised for a number of issues:

• Diminishing asset: Leases run down over time, which can affect property value and mortgage availability.
• Lack of control: Leaseholders often have little say in how their building is managed or what service charges are imposed.
• Onerous terms: Some leases include escalating ground rents or unexpected costs.

High-profile media stories and parliamentary inquiries have exposed these problems, leading to a wider call for reform.

Why Commonhold is Gaining Attention

Commonhold addresses many of the shortcomings of leasehold:

• Perpetual ownership: Owners hold their flats forever, not for a fixed term.
• Democratic management: Every owner has a vote and say in decisions affecting the building.
• Transparent costs: Service charges and maintenance fees are agreed upon collectively.
• Simplified legal structure: Easier to understand and manage, especially for clients seeking long-term security.

For law firms, this presents a new area of advisory work, both in helping clients understand commonhold and in navigating conversions or purchases.

Why Hasn’t Commonhold Taken Off?

Despite its benefits, commonhold remains rare. Some of the barriers include:

• Lender reluctance: Mortgage providers have been slow to fully embrace commonhold.
• Developer resistance: Leasehold is often more profitable for developers.
• Conversion challenges: Transforming existing leasehold buildings into commonhold requires unanimous agreement among leaseholders and often the cooperation of the freeholder.
• Lack of awareness: Many buyers and even property professionals are unfamiliar with the model.

Government Support and Reform

In recent years, the UK Government and the Law Commission have signalled strong support for commonhold reform. Key proposals include:

• Simplifying the conversion process from leasehold to commonhold.
• Creating incentives for developers to build new commonhold properties.
• Strengthening the legal framework to make commonhold more flexible and robust.

If enacted, these reforms could significantly increase the number of commonhold properties on the market.

Is Commonhold the Future?

There is growing consensus that commonhold could represent a fairer and more sustainable model of ownership, especially in an era where home ownership needs to be both secure and transparent. For clients, particularly those purchasing flats, commonhold offers an appealing alternative with long-term advantages. For lawyers, this is an emerging field with increasing demand for guidance, especially as reforms progress.

Commonhold may not yet be the norm, but it is fast becoming a serious contender for the future of flat ownership in the UK. With government backing and public awareness on the rise, this model offers a promising path forward for homeowners, property professionals, and legal advisers alike.

Whether you're a property lawyer advising clients, a developer exploring options, or a buyer seeking a more secure investment, understanding commonhold is essential as the property landscape continues to evolve.

We understand the complexities of residential property law and are committed to helping our clients navigate the changing landscape. Whether you're a homeowner, investor, or developer, our experienced property team can provide practical, expert advice on all aspects of commonhold and leasehold ownership.

If you’re considering buying a flat, converting a leasehold, or simply want to understand your options, contact today on 01202 526343 or via online: Contact Us AB Solicitors For Your Legal Needs

 

 

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