Labour’s 2024 election manifesto promised to ‘finally bring the feudal leasehold system to an end’. Despite much noise in the intervening period, it was only on 27th January 2026 that the Ministry for Housing, Communities and Local Government published the draft Commonhold and Leasehold Reform Bill (‘the Bill’). The Bill sets out the government’s proposals for ‘reinvigorating commonhold’, in addition to other significant leasehold reforms. Under the Bill, leasehold will be banned ‘except in limited cases’ and developers will no longer be allowed to sell new flats as leasehold.
Instead, new flats will be sold as commonhold, a model that is widely used across the world. However, it is not yet clear how existing leasehold properties will transition to the commonhold model.
What is commonhold?
Commonhold is form of ownership that allows flat owners to own and manage their buildings jointly. You could be forgiven for thinking that commonhold was a new concept, but it is not. Commonhold was introduced by the Commonhold and Leasehold Reform Act 2002 but failed to gain traction. The result is that leasehold remains the most commonly used form of tenure of occupiers of flats in multi-let buildings.
While leaseholders have a leasehold interest in their flat or apartment, the land on which the building is situated together with the building itself, is owned by a freeholder. The freeholder provides the services and incurs costs associated with the maintenance and repair of the building, which are charged to the leaseholder by way of a service charge. With commonhold, the unit owners are in control.
What are the benefits of commonhold?
In commonhold, each person owns their individual property, know as a unit. The unit owner has a share in the commonhold association, which owns and manages the common parts of the building. Together, individual unit owners will have more control over the management of the building in which the unit is situated. It is a form of freehold ownership where there is no requirement for involvement of a third-party and so therefore there is no landlord.
There is also no lease. The rights, responsibilities and rules for unit owners are detailed in the Commonhold Community Statement. This is a standalone document that applies to all units, which can be varied. There is also a system for democratic decision making within the commonhold. While many of the rules are specified by law, there is the possibility for local rules, which are specific to a particular development or block.
Service charges will be replaced with commonhold contributions to shared costs. Agreement on the annual budget must be secured by a vote held by the unit holders. The result is that the unit holders will have a say on how charges are set or contest them before the costs have been incurred.
There will also be no right of forfeiture which is the process by which a long lease can be brought to an end early due to leaseholder default. It will be replaced with a fairer, proportionate enforcement regime, where the court will have the power to make a ‘remedial order’, ‘order for sale’ and/or a ‘costs order’.
Are there already any commonhold developments?
Yes. Given the Commonhold and Leasehold Reform Act 2002 obtained Royal Assent on 1st May 2002, it is perhaps unsurprising that there were initially a few developments that were created commonhold. There are less than 20 developments throughout England and Wales with the nearest to this firm being in Bristol and Crewkerne, Somerset. There do not appear to have been any new commonhold developments ‘created’ since 2009.
What happens next?
The government says that it will implement the ban on new leasehold flats only after the new commonhold framework, to include any necessary regulations, has been brought into force. The current estimate for this is late 2028.
Before the rollout to commonhold can happen, it needs to be established in law how it will work. Once this happens, it will still take time for commonhold to replace leasehold, given the vast number of leasehold properties that are currently in existence (around five million in total) and that are being built each year.
Presently, alongside the Bill, the government has announced a consultation on the proposed ban on leasehold flats, which is open until 24th April 2026. The consultation covers a variety of aspects, from the definition of a ‘flat’ to the types of land ownership that should be exempt from the ban on new leasehold flats.
There are a number of questions that need to be answered, namely whether the proposals to reinvigorate commonhold will be acceptable to lenders and developers. In addition, and perhaps the most important question of them all is whether commonhold is truly the solution to the leasehold conundrum? As always, the devil will be in the detail.
Watch this space.
Next Steps: Get in touch
If you would like to discuss your Conveyancing matter then please don’t hesitate to reach out to our team of legal experts at John Hodge Solicitors, conveniently located throughout the South West, with offices in Bridgwater, Bristol, Clevedon, Wedmore, Weston-super-Mare and Yatton.
You can contact us either:
- by email
- via our website
- by calling us on 0800 097 8611
Mark Wright
Gareth Richards
Magdalena Neale
Samuel Turner