The government published the Commonhold White Paper on 3 March 2025 in which they committed to banning the sale of new leasehold flats, after introducing what they termed a “comprehensive new legal framework for commonhold”.
In this blog post, I explain what commonhold is, how it differs from leasehold and a share of the differs from freehold, what happens next and when the ban on new leasehold flats may come into force.
It is the blog version of the YouTube video below. The YouTube video was posted in March 2025, and I have updated this blog post on 19 December 2025 following Matthew Pennycook’s letter of 18 December 2025 to the Chair of the Housing, Communities and Local Government Select Committee.
I recorded the video below in March 2025.
The plans for commonhold explained
- What is leasehold?
- What is commonhold?
- The differences between leasehold and commonhold
- How does commonhold differ from share of the freehold?
- How does commonhold differ from the Right to Manage?
- Don’t we have commonhold already?
- What about existing flats?
- When will the ban on leasehold for new flats come into force?
- Where are we with the Leasehold and Commonhold Reform Bill?
- Final thoughts
What is leasehold?
Before explaining what commonhold means, it’s useful to revisit what leasehold is.
An owner of a leasehold flat (leaseholder) doesn’t actually own their property. Instead, it is the freeholder who owns the land and the property built on it. They give the flat owner permission to live in the flat, which is limited to a certain number of years, on terms set out in a lease agreement, and subject to various pieces of legislation.
The term of a lease for a flat is usually 99 or 125, and it decreases year by year until it eventually runs out, when it will revert back to the freeholder, unless the leaseholder extends the lease or buys a share of the freehold.
It’s therefore a time-limited “wasting asset” in that its value will fall over time as the unexpired time on the lease reduces.
In return for the right to live in the property, the leaseholder pays ground rent and a service charge to pay for repairs and maintenance. The rights of the leaseholder and freeholder are set out in a lease agreement, which is also subject to legislation, such as the Leasehold and Freehold Reform Act 2025.
Leaseholders currently risk having the lease forfeited if they do not pay the service charge or ground rent.
Consequently, leaseholders don’t have the same control over their home as a freeholder. They need to obtain consent from the freeholder to let the property, to sell the property and make certain alterations, which invariably involves paying the freeholder a fee.
Although leasehold is being reformed, the government wants to make commonhold the default tenure.
>> Related Post: The latest on the implementation of the leasehold reform
>> Related Post: The latest on the new Leasehold and Commonhold Reform Bill
What is commonhold?
The Commonhold White Paper says “Commonhold ownership is a form of freehold ownership where individual property owners each own their unit outright, with no expiring term”.
This means that the commonhold tenure enables flats in a building or development to be owned on a freehold basis. The owner of a commonhold flat is the “unit holder”, owning the freehold of their flat. Each flat owners own theirs unit outright, with no expiring term.
The unit holder is also a member of Commonhold Association (ao Residents’ Association) which owns and manages the common parts of the property for all of the unit holders.
Commonhold is along the same principles as “strata” or “condominium” titles that are used in the USA, Canada, Australia, New Zealand and across Europe to enable flats to be owned on a freehold basis.
With commonhold, there is no lease, and the Commonhold Association decides how to manage the property. It is an alternative way of owning a flat which avoids the shortcomings of leasehold ownership.
For larger blocks, the unit holders wouldn’t carry out the day-to-day management themselves, but would instead appoint agents to manage it for them. However, it would be the unit holders (rather than an external freeholder) who would control the appointment and management of those agents.
The differences between leasehold and commonhold
Commonhold ownership allows people to fully own their flat outright, with no expiring term or need to save to extend a lease.
They don’t need to pay ground rent and don’t have a third party freeholder.
There are no leases. Instead, the rights and responsibilities of all the owners are set out in a Commonhold Community Statement (CCS). This is a “rulebook” which sets out how the shared areas and facilities will be managed, maintained and funded, as well as the obligations for each person.
To use the government’s words: “It establishes a democratic system of decision-making and helps prevent disputes”.
>> Related Post: The latest news on the reform of ground rent
How does commonhold differ from share of the freehold?
Does ‘share of freehold’ provide the same benefits as commonhold?
A share of freehold does provide some positive benefits for owners of flats as it means they can own their flats without a freeholder, which is technically a third party as it’s usually a company that the flat owners have a share in.
The government points out that there will still be a lease and they won’t fully “own” their flat and they’ll be governed by leasehold legislation.
How does commonhold differ from the Right to Manage?
The Right to Manage (RTM) allows leaseholders in England to take over the management of their building from the landlord or existing managing agent, without needing to prove fault or obtain the landlord’s consent. This statutory right was introduced by the Commonhold and Leasehold Reform Act 2002.
Here are the key eligibility requirements:
- Leaseholders must hold long leases, originally granted for more than 21 years.
- The building must be self-contained, ie structurally detached or capable of independent management.
- At least two-thirds of the flats must be let to qualifying leaseholders.
- Non-residential (commercial) use must not exceed 50% of the total floor area. It was 25% before the Leasehold and Freehold Reform Act 2025.
Although RTM can help leaseholders who are unhappy with their block management and give them control over day-to-day management (maintenance, repairs, insurance, service charges), the property remains a leaseholder and subject to the disadvantages of leases, for instance the lease terms, high ground rent and the risk of forfeiture.
Don’t we have commonhold already?
Yes. Commonhold was originally introduced by the Commonhold and Leasehold Reform Act 2002 which came into force in September 2004, over 20 years ago.
However, it didn’t take off. There are only 20 commonhold developments. The system wasn’t very flexible – only really suitable for small blocks – and there were no real incentives to change. People understand leasehold, and preferred to stay with it.
The government is now intending to make commonhold more flexible and less bureaucratic, and implement a lot of the recommendations in the Law Commission’s report in 2020.
The government intends to ban the sale of new leasehold flats, making commonhold the standard form of ownership for new developments. They will launch another consultation later in 2025 to work out the best way to do this.
What about existing flats?
The government is wanting to make it easier to convert an existing leasehold property to commonhold, but it doesn’t look like it will be compulsory. They’ll be consulting about this.
When will the ban on leasehold for new flats come into force?
The government wants to ban the sale of new flats on a leasehold basis so that commonhold will become the standard tenure.
They’ve not given a date for this, and have said they want to establish “a viable commonhold model as the essential first step towards the development of a ban, so we will not ban the use of leasehold until we are confident that a viable alternative, through reformed commonhold, is in place.”
Where are we with the Leasehold and Commonhold Reform Bill?
The Commonhold White Paper said the government would “publish a draft Bill in the second half of 2025 for pre-legislative scrutiny” and then a final Bill will be presented to parliament in 2027, a view to it coming into force by the “end of this parliament”. That means before the next election, due by summer 2029.
However, in a letter on 18 December 2025 from Housing Minister, Matthew Pennycook, to the Chair of the Housing, Communities and Local Government Select Committee, he confirmed that “due to unforeseen delays, we will not be in a position to publish the draft Bill and accompanying consultation on banning the use of leasehold for new flats before the Houses rises for Christmas Recess.” (Said “unforeseen delays” were not detailed).
Matthew Pennycook added “we expect to be in a position to publish the draft Bill for scrutiny early in the new year.”
If and when this happens in the new year, there will me more discussion about commonhold in the media and in parliament, and the government will “start to engage consumers directly so that they will start to become more aware of the term ‘commonhold’ and begin to understand what this might mean ahead of commonhold flats becoming available on sites across the country”.
Final thoughts
Commonhold is very complicated, and a lot of work is needed before it becomes sufficiently viable to ban leasehold for new flats.
I personally can’t see existing developments changing to commonhold when they have the share of the freehold, and this is due to get cheaper when the Leasehold and Freehold Reform Act 2024 comes into force.
I would be surprised if the ban on leasehold flats will be in place by 2029.
I note it is proposed that owners of a Commonhold Unit would be a members of the Commonhold Association. And the Commonhold Association will likely be a company limited by guarantee.
Some Commonhold Unit owners would likely become the directors of the Association with responsibility for day to day management of the company, eg appointing an agent, instructing agent on repairs and maintenance, procuring insurance, make filings with Companies House etc.
If the Commonhold Association has separate legal personality and Unit Holders don’t have an automatic right to be a director of the Commonhold Association this seems to separate ownership from management.
How is this different to a leaseholder with a share of freehold arrangement where directors can dictate priorities without its members having very much say?
As forfeiture is not applicable, if a Unit Holder can’t pay for major works then the Commonhold Association may have to litigate for specific performance to pay money due? As I understand it specific performance is an equitable remedy. Even if judgment is made in favour of the Association it may be difficult to enforce the judgment which leaves everyone at the mercy of that Unit Holder who can’t pay as to whether vital works can go ahead. And lenders with a security interest may not be prepared to pay either as their security interest is safe since forfeiture is off the table. What happens then?
And if I understand correctly, members of the association would not be entitled as of right to see any legal advice procured by the Commonhold association as the “shareholder rule” may no longer apply? So despite owning a freehold like interest you may be in the dark
about key issues in the building. This too does not seem dissimilar to a leasehold with a share of freehold.
Hi L Bird,
Many of your comments are not correct regarding commonhold which is concerning as we want commonhold to be understood for existing leaseholders to convert to commonhold as it’s a simpler and easier ownership model than leasehold or share of freehold.
If you want the new style of commonhold to be understood, it would be more useful if you explained in what way you perceive L Bird as being incorrect, as all the observations seem very reasonable. Indeed, they are the kind of views that have probably kept the existing commonhold legislation from common adoption. I for one do not see that commonhold makes anything easier for anyone, and the current proposals will probably not do much better than the last, despite the prospect of yet another long period of government attempting to make it work. Proposed enforcement of another, different, dogs dinner will be just ridiculous, like the Renters Rights Bill, with all of its ignored serious adverse consequences!
Hi Commonhold Noe
Please could you say which of my comments are incorrect and eplain why you consider them so.
It would be helpful to know what you consider is incorrect so I may respond.
Thank you
I have also heard that Commonhold could pursue a Commonhold unit owner for a debt and enforce it by way of registering a charge or requesting an order for sale.
As I understand it if a sale proceeded the Commonhold owner would be able to keep any money left over after the debt has been discharged. So it is less draconian than compared for a leaseholder whose lease is forfeit where they end up with nothing unless the court grants relief.