Commonhold: A new era for homeownership?

Residential legislative change continues apace – this time on the government’s much vaunted proposed reform of commonhold as an alternative to leasehold.

The Ministry of Housing, Communities & Local Government’s widely reported white paper on commonhold (published on 3 March 2025) sets out proposals for addressing some of the main criticisms of the existing law of commonhold and how it will reinvigorate this novel form of property ownership ensuring it becomes the default tenure.

Incorporating the main recommendations set out in the Law Commission’s 2020 report on reinvigorating commonhold, the white paper outlines an intended ban on the sale of new leasehold flats, making commonhold the standard form of property ownership for new developments. However, it acknowledges that the abolition of leasehold cannot happen until the commonhold model is fit for purpose.  Given the complexity of this undertaking, this will require care and attention.

The government has indicated the updated framework for commonhold will be contained in draft legislation for pre-legislative scrutiny expected later this year. This will provide sufficient detail for parliament to fully understand and test the commonhold model and prepare the real estate market for the impending change when commonhold is delivered at scale. A draft Commonhold and Leasehold Reform Bill is likewise anticipated to be introduced in late 2025 and will contain many of the Law Commission’s remaining recommendations on the reform of leasehold.

While we await the detail, the white paper promises that the government will continue to work with industry and consumer groups to ensure that developers, lenders and property professionals are well prepared for commonhold to become the new standard tenure of property ownership.

Commonhold allows flat owners to collectively manage their buildings through a commonhold association, eliminating ground rents and the risk of forfeiture. The government also plans to simplify the process for converting existing leaseholds to commonhold and introduce a Code of Practice for cost-sharing.

Supporters argue that commonhold is a superior tenure, providing outright ownership without the loss of value experienced with a diminishing lease term or the prospect of an escalating ground rent. It also offers homeowners greater control over building management and long-term planning, which is often restricted under leasehold.

However, commonhold faces hurdles. Historically, it has struggled to gain traction due to limited mortgage availability and developer resistance. Critics warn that collective decision-making within commonhold associations could lead to delays or disputes over maintenance and upgrades. Concerns have also been raised about the transitional impact on existing leaseholders and the potential disruption to housing supply.

While the white paper marks a significant step toward reforming property ownership, in line with the government’s manifesto promise, its success will depend on overcoming practical challenges and balancing the interests of all stakeholders in the housing market. In a highly complex legislative landscape that will require detail over pace.

How we can help

Our residential estates team advises landlords and leaseholders on all aspects of residential leasehold and property law.  If you would like further guidance on statutory reforms or any other aspect of this complex area of law, please get in touch.