What is commonhold, really?

Commonhold is not a new idea. It's been a legally available way to own a flat in England and Wales since the Commonhold and Leasehold Reform Act 2002 came into force (legislation.gov.uk). Yet more than two decades later, fewer than 20 commonhold developments have ever been created in this country (Policy Threads). That gap — between a workable legal structure and near-total non-adoption — is the entire reason the government is now legislating again.

The basic model

Under commonhold, each flat ("unit") is owned outright and permanently by its occupier — there's no landlord, no lease, and no date on which your right to live there expires. The building's shared structure and common parts (the roof, entrance hall, lifts, gardens, corridors) belong not to any individual owner but to a commonhold association — a private company, limited by guarantee, in which every unit owner is automatically a member and gets a vote. The association is legally the freeholder of the building; the unit owners collectively are the association.

Day to day, the commonhold association does what a Resident Management Company (RMC) does today: sets and collects the service charge, arranges insurance and maintenance, appoints (and can dismiss) a managing agent, and runs the annual budget. The rules for how the building is run are set out in a Commonhold Community Statement — a kind of rulebook that covers matters like use restrictions, contribution shares for costs, and voting.

Because there's no lease, some things that define leasehold simply don't exist in commonhold: no ground rent (there's no landlord to pay it to), no lease extension to negotiate, and no forfeiture (there's no lease to forfeit). The March 2025 Commonhold White Paper set out the government's intent to build a version of this model that actually works in practice, rather than the largely unused 2002 version (GOV.UK, White Paper coverage via BBC News, 3 March 2025).

Why hardly anyone has used it

The 2002 Act's commonhold framework had real design flaws that made it commercially unattractive:

• Unanimous consent for conversion. Converting an existing leasehold building to commonhold required agreement from essentially everyone with an interest in it — every leaseholder and the freeholder, and often mortgage lenders too. In any building of reasonable size, getting total unanimity was close to impossible.
• Mortgage lender caution. Lenders were unfamiliar with commonhold, unsure how it would behave in cases of default or dispute, and reluctant to lend against it — which in turn made commonhold units harder to sell, which in turn made developers reluctant to build them. That is starting to shift: Nationwide, HSBC and Barclays already offer mortgages against commonhold units, though appetite across the wider lending market remains patchy (GOV.UK).
• No support for mixed-use or phased developments. The original framework struggled to accommodate buildings with shops or offices alongside flats, or developments built and sold in phases — both common in modern housebuilding.
• No mandatory reserve fund and weak dispute resolution. There was no requirement to set aside money for future major works, and no clear mechanism for resolving disagreements or dealing with an owner who stopped engaging or paying.
• Developer incentives ran the other way. Leasehold, with its ground rents sold on as an income stream to investors, was often more profitable for developers to create than commonhold. Baker McKenzie's analysis of the draft Bill describes the existing commonhold regime as "barely used" precisely because of this combination of legal and commercial barriers (Baker McKenzie).

What the new Bill tries to fix

The draft Commonhold and Leasehold Reform Bill, published 27 January 2026, is built largely on recommendations from three 2020 Law Commission reports on commonhold, enfranchisement and Right to Manage (GOV.UK; Housing Minister speech, GOV.UK, 29 April 2026). Its key fixes, per law-firm analysis of the draft Bill, include:

• Lowering the conversion threshold. Rather than unanimous consent, the draft Bill proposes a route to convert existing leasehold buildings to commonhold where at least 50% of qualifying leaseholders agree, brought into line with the wider enfranchisement process (Macfarlanes).
• Mandatory reserve funds, so commonhold associations are legally required to plan and save for major works.
• Stronger governance and dispute resolution, including new First-tier Tribunal powers to appoint directors to run a commonhold that has low owner engagement, or to remove directors who fail in their duties (Baker McKenzie).
• Support for mixed-use and shared ownership. The framework is being extended to work for buildings with commercial units, and for shared ownership (including Older Persons Shared Ownership and Home Ownership for people with Long-term Disabilities, or HOLD), home purchase plans, Islamic finance products, and some equity release arrangements, which will still be permitted within a commonhold structure under appropriate voting safeguards (gowlingwlg.com; GOV.UK).
• Extra safeguards for high-risk buildings. Blocks of 18 metres or 7 storeys or more in height — already subject to extra fire-safety duties, and blocks over 11 metres already caught by the Building Safety Act 2022 — may need specialist fire-safety managing agents even after converting to commonhold, since the building's safety obligations don't disappear along with the freeholder (GOV.UK).
• Some land stays outside the system. A handful of categories are proposed to remain excluded from commonhold registration altogether, including flying freeholds, certain agricultural land, land subject to compulsory purchase, some land used for worship, and some former school sites under 19th-century schools legislation (GOV.UK).
• A ban on new leasehold flats, so that developers can no longer simply default to leasehold. A dedicated consultation, running 27 January – 24 April 2026, set out the ban's intended scope: purpose-built new flat developments, houses newly converted into flats, commercial buildings redeveloped to include flats, purpose-built rental blocks later sold on, and other buildings with no existing registered long leases that are refurbished and resold. Existing leasehold flats, Build-to-Rent and social-rent blocks (while purely rented) and entirely commercial buildings would sit outside the ban (GOV.UK).
• Lighter-touch rules for very small buildings. The government is proposing a "micro-commonhold" category for buildings of four residential units or fewer, with relaxed director and AGM requirements compared with the standard rules (normally a minimum of two directors, with a third retiring and standing for re-election at each AGM) that would otherwise apply (GOV.UK).

The timeline for "default by the 2030s"

The government's own ambition, as set out by the Housing Minister, is for commonhold to be available and workable before the end of this Parliament (by 2029), with new leasehold flats banned to make commonhold the practical default for new housing thereafter (GOV.UK, 29 April 2026). However, the Housing Minister has himself said it is "highly unlikely" the ban on new leasehold flats will actually switch on before the next general election, citing complex trade-offs with housing supply (Macfarlanes). The draft Bill itself is still pre-legislative: a House of Commons select committee reported on it on 27 May 2026, and the government's formal response, due 27 July 2026, has been delayed past the summer parliamentary recess following the Prime Minister's resignation on 22 June 2026 (Macfarlanes). [UNVERIFIED: no government or parliamentary source has committed to commonhold becoming the tenure used by the majority of flats, or the outright "default" in practice, by any specific year in the 2030s — this framing is directional government ambition, not a confirmed target date.]