Plans to replace leasehold with commonhold move forward with new white paper

On 3 March 2025 the Government published the Commonhold White Paper setting out proposed changes to the Leasehold system.

The plan is to revise commonhold and make it the default tenure, which means that, unlike leasehold ownership where third-party landlords own the buildings and make decisions on behalf of the homeowners, the homeowners will have an ownership stake in the building from the outset and have greater control over its management.

Changes in the Commonhold White Paper include:

• Commonhold, a suggested improvement on leasehold ownership, will be reinvigorated under major reforms
• New leasehold flats to be banned as the government takes steps to honour its manifesto commitment to ensure commonhold becomes the default tenure
• Major change will give homeowners a stake in the ownership of their buildings and will hand them more power, control and security over their homes.
• Change will ensure that the unfair feudal leasehold system is brought to an end, building on the Plan for Change ambition to drive up living standards.
• New rules that will enable commonhold to work for all types of developments, including mixed-use buildings and allowing shared ownership homes within a commonhold.
• Greater flexibility over development rights, helping developers build with confidence and maintaining safeguards for the consumer.
• Giving mortgage lenders greater assurance with new measures to protect their stake in buildings and protect the solvency of commonholds – such as mandatory public liability insurance and reserve funds and greater oversight by commonhold unit owners to keep costs affordable.
• Strengthening the management of commonholds, with new rules around appointing directors, clear standards for repairs, and mandating use of reserve funds; and
• Providing an enhanced offer for homeowners – including requiring greater opportunities for democracy in agreeing the annual budget, clarifying how owners may change “local rules” over how a building is run and new protections for when things go wrong.

Commonhold ownership allows people to fully own their property outright with no expiring terms and no need to pay ground rent.  Each property owner will become part of a commonhold association when purchasing their property which overseas the management of the building unless it is decided to bring in a managing agent.

There will be a new Code of Practice which will set out how costs should be apportioned in commonhold properties.

A draft Leasehold and Commonhold Reform Bill will be published later this year setting out the framework for how the reformed commonhold will work.

Further guidance and support

Our Residential Property team have extensive experience advising both landlords and leaseholders. Our residential property solicitors are based in Maidstone and Canterbury and are ready to help with any legal advice you may require so please get in touch today.

This content is correct at time of publication