The future of home ownership: commonhold to replace leasehold under major reforms?
The UK government has recently announced a shift in property ownership, marking the beginning of the end for the out-dated leasehold system. Under these proposed reforms, commonhold will be reinvigorated and made the default tenure for flats, ensuring homeowners have full control over their properties.
What’s Changing?
- Ban on new leasehold flats – The government will prohibit new leasehold flats, ensuring future homeowners are not burdened by ground rent.
- Empowering homeowners – Commonhold will give homeowners a stake in the ownership of their building, removing the power imbalance that currently exists under leasehold.
- Greater control and security – Homeowners will no longer be subject to the whims of freeholders and managing agents.
A Fairer System for Homeowners
Unlike leasehold, where homeowners effectively rent their property from a freeholder for a fixed term, commonhold grants full ownership. This means:
- No ground rent – Homeowners will not have to pay escalating fees just to live in their own property.
- Self-management – Residents will have control over how their buildings are run, including maintenance and service charges.
- No expiry date – Commonhold properties do not revert back to a landlord after a set period.
What This Means for Existing Leaseholders
While the ban on new leasehold flats is a major step forward, millions of existing leaseholders are still affected by unfair terms. The government is pushing ahead with reforms to:
- Make it easier and cheaper to buy a freehold or extend a lease.
- Strengthen protections against unfair service charges.
- Improve regulation of managing agents.
- Reform forfeiture laws to prevent homeowners from losing their property unfairly.
Next Steps
Later this year, the government will publish a Bill setting out the full legal framework for reformed commonhold. A consultation on banning new leasehold flats will also take place to determine the best approach.
If you are looking to buy or sell a leasehold property in England and Wales, then please call us on 01267 237441 or email us at mail@utk.co.uk to speak to one of our experienced property solicitors.