Commonhold explained: What it is and what it means for leaseholders (2025 update)

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.

commonhold

KEY INFORMATION

Commonhold at a glance

  • New leasehold flats will be banned and commonhold will become the default tenure, under government plans.
  • Commonhold provides freehold ownership for flats and other interdependent buildings. This means you’ll own the property indefinitely unlike leasehold where you’ll own it for a fixed period.
  • You’ll share ownership of the communal areas through a commonhold association, which 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. This is a set legal framework that cannot be altered.
  • The government has promised to publish a draft Leasehold and Commonhold Reform Bill later this year. In March 2025, a White Paper was published including a number of suggestions to make it easier to run buildings under commonhold.

What is commonhold?

Commonhold is a form of ownership that allows flat owners to own and manage their buildings jointly and is an alternative to the leasehold system.

Is Commonhold law yet?

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Minister of State for Housing and Planning, ‘for a variety of reasons it failed to establish itself and is now out of date.’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 new plans to ban the sale of leasehold flats and reinvigorate commonhold through the introduction of a comprehensive new legal framework are government proposals and are awaiting legislation.

How does commonhold work?

Under the government’s new proposals, here are the key features of how commonhold would work:

  • Together each ‘unit’ such as a flat or shop, shares ownership of the communal areas through a ‘commonhold association’. This is a company that all unit-owners are members of and jointly control.
  • A Commonhold Community Statement, that defines the rights, responsibilities, and rules for all unit owners within a commonhold, will be used instead of a lease. Unlike leases which can vary, this is a set legal framework that cannot be altered.
  • Commonholders will also 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 their home to repay what they owe with any outstanding balance repaid to the owner.
  • 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. Commonholds may be divided into sections to reflect access to services or facilities, such as car parking or a gym. Only commonholders using/ with access to 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.

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Leasehold vs commonhold vs share of freehold: Key differences

Leasehold with third party landlordLeasehold following Right to ManageLeasehold, share of freeholdCommonhold
Ownership lasts foreverNoNoYes – may need to grant new leaseYes
Control over your homeLow limited by landlordMediumMediumHigh
Third party landlordYesYesNoNo
RulesSet by individual leases  Set by CCS – common to all units
Ground RentYes, according to individual leasesYes, according to individual leasesYes, according to individual leasesNo
Paying for shared facilitiesService charge regulated by lease and governed by leasehold lawService charge regulated by lease and governed by leasehold lawService charge regulated by lease and governed by leasehold lawCommonhold contributions governed by CCS and commonhold law
Source: Commonhold White Paper: The proposed new commonhold model for homeownership in England and Wales

Leasehold and Commonhold Reform Bill: Latest news

  • The government’s Commonhold White Paper (published in March 2025) said that government 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.’
  • The government has promised to publish a draft Leasehold and Commonhold Reform Bill later this year.
  • 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.

Are you a leaseholder and not sure what to do next? Our lease extension partners can provide a free consultation and advice you can rely on.

Find a Lease Expert Solicitor

Get expert advice on extending your lease, buying your freehold or applying for the right to manage.

Get a free consultation & quote

How soon will the rollout to commonhold happen?

It will take time for commonhold to replace leasehold given there are around 40,000 flats built each year. It’s expected that some leasehold flats will convert to commonhold but it’s too early to know how many are expected to do this.

Do other countries use the commonhold system?

Yes, 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, that can leave leasehold flat owners having to pay for expensive lease extensions and high levels of service charge.

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Pros and cons of commonhold

Pros of commonhold (proposed model)

  • No ground rent, ownership is indefinite.
  • Joint ownership via the commonhold association, with no third party freeholder via a standardised ‘rulebook’.
  • Budgeting via forward-looking contributions and mandatory reserves.

Cons/ current challenges

  • Conversion from leasehold may be complex.
  • Mortgage lender acceptance yet to be clarified.

How is a commonhold building managed?

  • When you buy 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, such as the roof, stairways and any lifts.
  • 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 ongoing 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.

Will every unit owner get the same number of votes?

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

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.

How will commonhold work for shared ownership properties?

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

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 under the proposed new system.

  • 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.

Will commonhold flats be worth more?

It’s too early to say however we would 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 under the proposed new system to make the process of converting to commonhold simpler and easier for leaseholders.

Should I wait for commonhold or extend my lease now?

There are lots of factors you’ll need to consider when it comes to whether to extend your lease now or to wait. Firstly, you may want to wait for commonhold, although bear in mind noone knows how long this will take to come in, how easy it will be to convert an existing leasehold property to commonhold and the costs involved.

There is also ongoing uncertainty of when and if leasehold reform will happen.

So getting expert advice on when to extend your lease is recommended to make sure you make the best decision based on your personal circumstances.

Are you a leaseholder not sure what to do next? Our lease extension partners can provide a free consultation and advice you can rely on.

Find a Lease Expert Solicitor

Get expert advice on extending your lease, buying your freehold or applying for the right to manage.

Get a free consultation & quote

Commonhold proposals: Our view

Paula Higgins, CEO of HomeOwners Alliance, said:

Paula Higgins CEO HomeOwners Alliance

“We welcome the proposals to ban new leasehold flats and for commonhold to be the default tenure. Leasehold is an outdated feudal system and we have campaigned long and hard for the phasing out of leasehold, since 2017 in fact with our report, Homes Held Hostage report.

Can I get a mortgage on a commonhold property?

Around a third of mortgage lenders currently lend on commonhold properties. However, commonhold properties are fairly uncommon in their current form. And we expect the take up to be greater by mortgage lenders when this new commonhold system comes into effect.

As we understand it, 50% of mortgage lenders have said they will lend on commonhold properties if and when the proposed new reforms pass. And it’s expected that the rest of the market will follow and that commonhold mortgage lenders will become the norm.

Frequently Asked Questions

What is leasehold?

Leasehold means you own the property, not the land, and only for the length of your lease agreement with the freeholder. By comparison, freehold means you own the building and the land it stands on indefinitely. Read more in our guide on Leasehold vs Freehold – what’s the difference?

What is flying freehold?

A flying freehold refers to freehold property built over land which does not form part of the property. Some common examples include balconies overhanging someone else’s property and rooms above shared passageways that lie directly beneath. Properties subject to a flying freehold cannot be registered for commonhold purposes under the Commonhold and Leasehold Reform Act 2002.

What is commonhold property

Commonhold is an alternative to the leasehold system which allows you to own the freehold of individual flats and non-residential units in a building or on an estate.

Is commonhold the same as share of freehold?

No, commonhold is not the same as share of freehold. For example, if you own share of freehold you may need to pay ground rent. Also, you’ll pay for shared services by a service charge regulated by lease and governed by leasehold law. While commonhold contributions governed by the Commonhold Community Statement and commonhold law.

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.

How can I find out how much a lease extension costs?

While you can get an idea of the cost of buying up more years (referred to as the premium you have to pay to the freeholder for the extended years) with our lease extension calculator approaching a valuation surveyor with experience of lease extensions will be worth the investment and stop you paying over the odds for your extension. Want to get an idea of how much your lease extension will cost? Get an estimate today from our lease extension specialists.

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