Commonhold: A New Way to Own Flats in England and Wales

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The government is moving towards a major reform in how flats are owned, with the goal of ending new leasehold ownership for flats altogether. The proposed alternative? Commonhold — a type of ownership that’s familiar in other parts of the world but still rare in the UK.

While the government is still consulting on the details, here's what we know so far.

What Is Commonhold?

Commonhold is a type of freehold ownership designed specifically for flats. Unlike leasehold, there’s no expiring term, no ground rent, and no third-party freeholder. Instead:

  • Each flat owner owns their unit outright, permanently

  • All unit owners automatically become members of a Commonhold Association

  • This association owns and manages the building’s shared areas — such as stairwells, roofs, and external spaces — on behalf of all flat owners

  • A set of rules, called the Commonhold Community Statement, outlines each owner's rights and responsibilities

The association can manage the building directly or, more commonly in larger developments, appoint a professional management company for the day-to-day operations.

This model is comparable to strata schemes in Australia, Singapore, Malaysia or condominiums (or ‘condos’) in the US, Canada, Mexico, Thailand and Dubai (where ‘jointly owned property’ laws follow a condo-like structure) 

How Does It Differ from Share of Freehold?

At first glance, Commonhold might sound similar to owning a flat with a share of freehold, but the legal distinction is significant.

With share of freehold, you typically own your flat on a long lease and also hold a share in the company that owns the building’s freehold. While this arrangement gives flat owners more control, the lease structure still exists. That means:

  • The flat is still technically a leasehold, subject to leasehold legislation

  • Owners don’t have full, permanent ownership of their property in the eyes of the law

Commonhold, on the other hand, removes the lease entirely. It operates under a different legal framework (first introduced in 2004) and offers true freehold ownership of flats — a radical shift in how ownership is defined.

Why Isn’t It More ‘Common’?

Despite being introduced over 20 years ago, there are currently only around 20 commonhold developments in the UK.

This is largely due to:

  • Inflexible legislation

  • Limited public awareness

  • A lack of financial and legal infrastructure to support conversion from leasehold

What’s Changing?

The government has made it clear it wants commonhold to become the default model for all new flats. Current plans include:

  • Ending the sale of new leasehold flats, once a commonhold system is in place

  • Publishing a draft bill by the end of 2025 for industry and public feedback

  • Introducing formal legislation during this government term (and expected before the next general election)

This would be a landmark change in the property market — but there’s still a way to go before commonhold becomes the new standard.

What This Means for Landlords and Developers

If you’re involved in residential property — whether buying, selling, developing or managing — now is the time to stay alert to how commonhold might impact the market. While there’s no immediate change, commonhold could reshape:

  • How flats are sold and valued

  • The role of managing agents and freeholders

  • Long-term responsibilities for maintenance and decision-making

We’ll continue to monitor developments and share updates as the legislation progresses. If you’re considering a flat purchase or planning a future scheme, get in touch for advice on how upcoming changes could affect you.