Commonhold explained

The way we own property will change in the future: leasehold flats are set to be banned and replaced by ‘commonhold’. We look at what commonhold is and how it works.

What is commonhold?

Commonhold is a form of ownership that allows flat owners to own and manage their buildings jointly. And it’s an alternative to the leasehold system. And there are key differences including:

• You’ll own the freehold: If you buy a commonhold flat, you’ll own the freehold. This is different to buying a leasehold flat, which is the tenure most flats are currently sold under. With leasehold, you own the property, not the land, and only for the length of your lease agreement with the freeholder.

• Together each ‘unit’ such as a flat or shop, shares ownership of the communal areas through a ‘commonhold association’, which is a company that all unit-owners are members of and jointly control.
• Instead of having a lease there will be a Commonhold Community Statement, that defines the rights, responsibilities, and rules for all unit owners within a commonhold. Unlike leases which can vary, this is a set legal framework that cannot be altered.
• However, commonholders will have the power to set local rules, such as whether or not you can keep pets.
• There will be no ground rent or right of forfeiture. But the commonhold association will be able to recover money by ultimately forcing people to sell to repay what they owe.
• Service charges will be replaced with a forward-looking budget. This means commonholders will have a say on how charges are set or contest them before the costs have been incurred. And charges will depend on ‘sections’ such as car parking or a gym. Only commonholders using these facilities will pay for them.
• There will be an alternative dispute resolution to resolve disputes.
• Costs will be more predictable, there will be no need to save for lease extensions or ground rent payments and no unexpected fees to pay when you want to change or alter your property.

Leasehold and commonhold compared

	Leasehold with third party landlord	Leasehold following Right to Manage	Leasehold, share of freehold	Commonhold
Ownership lasts forever	No	No	Yes – may need to grant new lease	Yes
Control over your home	Low limited by landlord	Medium	Medium	High
Third party landlord	Yes	Yes	No	No
Rules	Set by individual leases			Set by CCS – common to all units
Ground Rent	Yes, according to individual leases	Yes, according to individual leases	Yes, according to individual leases	No
Paying for shared facilities	Service charge regulated by lease and governed by leasehold law	Service charge regulated by lease and governed by leasehold law	Service charge regulated by lease and governed by leasehold law	Commonhold contributions governed by CCS and commonhold law

Leasehold and Commonhold Reform Bill: Latest news

• The government has promised to publish a draft Leasehold and Commonhold Reform Bill later this year, while in March 2025, a White Paper was published including a number of suggestions to make it easier to run buildings under commonhold.
• This is in addition to the leasehold reform already underway, thanks to the Leasehold and Freehold Reform Act, which received Royal Assent in May 2024, and aims to strengthen existing consumer rights and introduce new ones for leaseholders such as by making it cheaper for some leaseholders to extend their lease or buy their freehold. Read more in our guide on Leasehold Reform.
• Commonhold is used widely around the world – also known as the Strata system in Australia and condominiums in North America. But in the UK most flats are sold as leasehold. This is an outdated feudal system that can leave leasehold flat owners having to pay for extensive lease extensions and high levels of service charge.

How does commonhold work?

Commonhold was introduced into the UK under the Commonhold and Leasehold Reform Act 2002. However, according to Matthew Pennycook, Minister of State for Housing and Planning, ‘for a variety of reasons it failed to establish itself and is now out of date.’

The government’s White Paper which was published in March 2025 intends ‘to reinvigorate commonhold through the introduction of a comprehensive new legal framework based on the vast majority of the recommendations made by the Law Commission in their 2020 report. This new legal framework will be supplemented by a ban on the sale of new leasehold flats, so that commonhold becomes the default tenure.’

How is a commonhold building managed?

• When you buy a property, such as a flat, in a commonhold, you’re buying a ‘unit’ and you’ll become a ‘unit owner’.
• All unit owners are entitled to become a member of the commonhold association, which owns and manages the common parts of the building or estate.
• The commonhold association will have at least two directors, these can be unit owners, or external professionals can be employed.
• The directors of the commonhold association decide how much money unit owners will need to contribute to cover the costs of repairing and maintaining the commonhold. They can also decide to manage the building themselves or appoint a managing agent to do it.
• Unit owners can participate in the commonhold association and vote on decisions like who to appoint as a director and whether to make building improvements, such as EV charging points.
• The commonhold association must have “articles of association” which govern how it operates.

Who will ensure the building is maintained?

Reserve funds will be mandatory to make sure money is available to maintain the building. And a reserve fund study will be required every 10 years. Also, at the commonhold association’s annual AGM owners may decide whether to set up any additional reserve funds to help them manage future planned expenditure. This should allow unit owners to budget across a number of years, avoiding large one-off bills that can occur in leasehold.

What is the Commonhold Community Statement

Each commonhold has a ‘rulebook’ called the Commonhold Community Statement, or CCS, which sets out the rights and obligations of the unit owner:

• The main rights and obligations are standardised and will be the same in every commonhold.

• However, the rules can be tailored by the commonhold association to include bespoke ‘local rules’.

How are commonhold disputes resolved?

Here’s the step by step process of resolving commonhold disputes.

• If a dispute arises between you and another unit owner or the commonhold association, you must follow the dispute resolution procedure for commonhold (set out in the CCS) before taking legal action.
• However, there will be a minority protection power, so an individual commonholder can go to the First-Tier Tribunal (Property Chamber) if they believe they are being unfairly disadvantaged. 
• Finally, if a dispute cannot be resolved through alternative dispute resolution, then unit owners will still be able to seek formal resolution by escalating their concerns to the Tribunal.

How soon will the rollout to commonhold happen?

The rollout to commonhold is expected to be fairly slow as approximately 40,000 flats are built each year. And there may not be a huge incentive for flat owners with a share of freehold to convert to commonhold.

Will commonhold flats be worth more?

Yes, we expect that over time commonhold properties will be priced higher than leasehold ones.

Can I convert my leasehold building to commonhold?

If you own a leasehold property in a shared building, it may be possible for you and the other leaseholders in the building to convert the building to commonhold. But this currently requires the unanimous consent of the freeholder, all other leaseholders in the building and their lenders.

However, the government is considering options to make the process of converting to commonhold simpler and easier for leaseholders.

How will Commonhold work for shared ownership properties?

Shared ownership properties will be commonhold. It is likely that the joint owners – the housing association and the shared owner will share voting rights.

Will every unit owner get the same number of votes?

Not necessarily. For example, bigger flats may have more votes than smaller flats.

Will retirement homes be commonhold?

It’s not yet clear if retirement homes will be commonhold. We’ll update this page as soon as the information is available.

Can I get a mortgage on a commonhold property?

Currently as we understand it, 50% of lenders have said they will lend on commonhold, and it’s expected that the rest of the market will follow.

Frequently Asked Questions