What is Commonhold?
Commonhold is an form of property ownership for flats in England & Wales. Instead of buying a lease which you only own for a limited period of time, you purchase a your flat which comes with co-ownership of the building. All unit owners then jointly own and manage the building’s shared areas through a “Commonhold association” (a limited company run by the owners). There is no external landlord, no ground rent, and—crucially—no lease expiry.
A Simple Example
Imagine a block of ten flats. The vast majority of similar blocks today are set up as leasehold: each flat carries, say, a 125-year lease and a separate freeholder owns the building. The freeholder arranges maintenance, recovers the cost through service charges and earns income from ground rent and from leaseholders who must pay to extend their leases when the term runs low. Under Commonhold, by contrast, each purchaser owns the building from day one. The ten owners automatically become members of a Commonhold association that owns the structure, roof, hallways and land. Decisions about maintenance, insurance and budgeting are made democratically—one owner, one vote.
Commonhold and Share of Freehold Compared
At first glance Commonhold is not drastically different from a share-of-freehold arrangement, where each flat owner holds both a lease and a share in the company that owns the building. The critical distinction is that share-of-freehold still relies on the lease: you hold two interests, the wasting lease of your flat and a share of the freehold. With Commonhold the lease disappears. You own only one thing—your flat’s freehold—and the shared parts are administered solely through the Commonhold association, governed by statutory rules rather than by a patchwork of leases and company articles.
The advantages of Commonhold
There is no ticking clock: your title lasts for ever, so you never face the cost or hassle of a lease extension. Because there is no landlord, you do not pay ground rent or hidden consent fees. Management is resident-controlled, so service charges reflect genuine costs instead of an external profit margin.
The disadvantages of Commonhold
For now, Commonhold is eceedingly rare with only a few hundred vs millions of leasehold properties. The reason is most new flats are sold as leasehold, so developers, lenders and conveyancers are more familiar with leasehold paperwork than with cCmmonhold documentation. If you did want to convert your leasehold flat to Commonhold you still have to buy out the freehold from the current owner, which is typically very costly. Commonhold offers limited extra benefit over a well-run share-of-freehold building, given both models put day-to-day control in the residents’ hands. Especially given lenders and solicitors encounter so few cCmmonholds, buying or selling a Commonhold property is slower and more costly.
Future Changes
Government policy across the main parties seems to be suggesting that if a new building is built those new flats would need to be Commonhold – however this is far from certain. There are proposals for how existing leasehold properties could be converted into Commonhold but these face the same challenges as all leasehold reform has faced. So whilst banning new leasehold properties might start to normalise Commonhold for developers, lenders and lawyers alike, it is still a very long journey before Commonhold would become the default tenure for flats in England and Wales.
