In a country where leasehold has long dominated multi-unit property ownership, commonhold represents a radical shift in how homes can be owned and managed in England and Wales. Yet, more than two decades since its introduction in 2002, commonhold remains almost invisible in the housing landscape.
With growing dissatisfaction over leasehold practices, ranging from high service charges to opaque ground rent agreements, commonhold is receiving renewed political, legal, and industry attention. As government-led reforms continue to reshape residential property law, the question is no longer ‘what is commonhold?’, but ‘why isn’t it more common?’
What Is Commonhold?
Commonhold is a form of property ownership that allows people to own their individual flat or ‘unit’ freehold, while jointly owning and managing the shared parts of the building (such as the lobby, roof, and garden) through a commonhold association.
This model is widely used internationally, particularly in regions such as Australia and North America. In England and Wales, it was introduced by the Commonhold and Leasehold Reform Act 2002 as an alternative to traditional leasehold, but uptake has been minimal.
How Commonhold Works
Each flat or unit in a commonhold development is owned outright on a freehold basis, not subject to time-limited leases. At the same time, all unit owners automatically become members of a commonhold association, a limited company that owns and manages the building’s shared spaces and fabric.
Key features:
• No ground rent
• No lease expiry
• One vote per unit owner in association decisions
• Transparent budgeting and service charges
• Equal rights and obligations among owners
Leasehold vs. Commonhold: a comparison
Leasehold:
- Fixed-term (e.g. 125 years);
- Ground rent is often payable;
- Management by freeholder;
- Restricted alteration rights; and
- Leases diminish in value.
Commonhold:
- Freehold tenure;
- No ground rent
- Management by owners;
- Permitted alterations; and
- Perpetual ownership.
Why Hasn’t Commonhold Taken Off?
Developer incentives - Developers prefer leasehold for its recurring income potential. A change to commonhold would result in a loss of ground rent income and the potential to sell their reversionary interests.
Lender reluctance – Whilst lender attitudes are improving, some mortgage providers are still unfamiliar with commonhold, especially for post-conversion flats. As a result, buyers may face reduced mortgage availability or slower approval times, which can impact their resale potential.
Legal complexity - Converting leasehold to commonhold requires unanimous consent, which in practice may be extremely difficult, particularly in large or mixed-use developments. One dissenting owner or an absent landlord can block the entire process. In addition, the conversion process would involve terminating all leases, setting up a commonhold association and creating a new commonhold community statement, requiring the coordination of leaseholders, solicitors, freeholders, managing agents and lenders.
Lack of public awareness - Common-hold is rarely marketed, and as a result, there is a lack of precedent. This creates uncertainty, which can deter buyers.
Recent Developments and Reform Proposals
In 2021, the government established the Commonhold Council, aiming to revive the model. The Law Commission has proposed reforms, including simplifying the conversion process, standardising documents, and promoting commonhold as the default tenure.
In March 2025, the government’s White Paper laid the foundation for a reformed, more widely adopted commonhold model. Major possible proposals include:
• Making commonhold the default tenure for new flats and banning new leasehold sales.
• Strengthening governance via mandatory:-
• Reserve funds for future maintenance; and
• Public liability insurance.
• Mandatory leasebacks: leaseholders who do not participate in the change to commonhold can continue as leaseholders. However, over time, they would be converted to commonhold and their lease phased out.
• Equity loan: non-participating leaseholders will be required to do so, and the Government will fund the upfront cost to pay for the conversion and will be paid back when the property is sold.
Market Implications
For developers: Less long-term revenue from ground rents.
For property lawyers: The need for training and documentation updates.
For lenders: New assessment criteria.
For homeowners: More security and democratic control.
Conclusion
While commonhold can offer long-term benefits, such as perpetual ownership, transparency, and democratic control, there are practical, legal, and financial hurdles. Future reforms, especially around conversion mechanics and lender assurances, are essential to make it a truly viable alternative to leasehold.
