Leasehold Advice
Commonhold Explained
Commonhold is an alternative to leasehold that has existed in English law since 2004 but has barely been used. This guide explains what it is, how it differs from leasehold and share of freehold, and where the reforms stand today.
The Big Idea
Commonhold is an alternative to leasehold for flats in England and Wales. Instead of holding the flat on a lease granted by an outside freeholder, each unit-holder owns their flat outright, and the shared parts of the building are owned and run by a company that the residents are members of. There is no lease term, no ground rent, and no separate freeholder. Each unit-holder is the freeholder of their own flat directly, with the shared parts of the building owned by the residents' association.
Commonhold came into force in English law on 27 September 2004 under the Commonhold and Leasehold Reform Act 2002, but it has barely been used. Most readers will never have come across a commonhold flat in practice, because the leasehold system has continued to dominate new flat developments. That may be about to change. The Law Commission has proposed a reformed commonhold system, the current government has committed to legislating for it, and the direction of policy is to make commonhold the default for new flats. None of that is yet law.
This guide describes commonhold as it currently stands in 2026 in England and Wales: what it is, how it differs from leasehold and from share of freehold, why so few buildings use it, where the reforms have got to, and what any of it means for someone selling a flat today.
This guide describes the law in England and Wales. Commonhold does not apply in Scotland or Northern Ireland, which have their own systems of flat ownership.
What Commonhold Is, and How It Differs from Leasehold
The simplest way to understand commonhold is by comparison with leasehold and share of freehold. The three tenures look superficially similar, but the underlying legal structure is different.
The commonhold unit
In a commonhold building, each flat is a commonhold unit. The unit-holder owns the unit on a freehold basis: outright, with no fixed term, no end date, and no separate freeholder above them. The unit is registered at HM Land Registry like a freehold house. Selling, mortgaging and inheriting work in much the same way as for a freehold property.
The common parts and the association
The parts of the building that are shared (the entrance hall, stairs, lifts, roof, exterior walls, communal gardens) are not owned by the unit-holders individually. They are owned by a commonhold association, which is a private company limited by guarantee. Every unit-holder is automatically a member of the association, and the association runs the building between the members. Decisions are made by the members at meetings, much as the residents in a share-of-freehold building manage the building through their company.
The Commonhold Community Statement
The constitutional document for a commonhold building is the Commonhold Community Statement. It sets out the boundaries of each unit, the boundaries of the common parts, the rules about the use of the units (for example whether short-term lets are allowed), the rights and responsibilities of the unit-holders and the association, and the basis on which the unit-holders pay their share of the running costs. It is read by a buyer's solicitor in much the same way a lease is read in a leasehold sale.
No lease, no ground rent, no extensions
There is no lease in a commonhold building, so there is no lease term, no marriage value, no need to extend, and no ground rent. The unit-holders pay an annual commonhold contribution (sometimes called a commonhold assessment) to cover the building's running costs, which works in much the same way as a service charge but is collected by the residents' own association rather than by an outside freeholder. The rules for the contribution are set out in the Commonhold Community Statement.
Why Commonhold Has Barely Been Used
Commonhold has been law since 2004, but only a small number of commonhold developments have been built. There are three reasons, in roughly equal measure.
Developers preferred leasehold
For a developer building a new block of flats, leasehold was simply more profitable. The freehold of the building could be sold on to an investor for a price that reflected the ground rent income and the potential to charge for future lease extensions. Commonhold offered no such ongoing income stream because there is no outside freeholder collecting rent. With no commercial incentive to choose commonhold, developers continued to build leasehold.
Mortgage lender caution
Mortgage lenders are conservative about new and unfamiliar tenures. With so few commonhold buildings to compare, lender criteria around commonhold flats were tighter than for leasehold, and a few lenders did not lend on commonhold at all. That tighter mortgage market made commonhold flats harder to buy, which fed back into developers' decisions not to build them. Today most mainstream lenders will lend on commonhold flats, but the legacy of caution persists.
No practical route to convert an existing block
The 2002 Act did include a route for an existing leasehold block to convert to commonhold, but it required unanimous agreement from the freeholder, every qualifying leaseholder, and any registered mortgage lender. In a block of even modest size that threshold is almost impossible to meet. As a result, conversion has happened only in a handful of cases. The Law Commission has proposed a much more workable conversion route, but those proposals are not yet law.
Could Commonhold Replace Leasehold?
The short answer is: probably not soon, but in the long run, very possibly for new flats. Two threads are moving forward, but slowly, and neither is yet law.
The Law Commission proposals
In 2020 the Law Commission published a detailed set of proposals for a reformed commonhold regime. The report recommends a workable route to convert existing leasehold blocks to commonhold (by majority rather than unanimous agreement), a clearer set of rules for the running of the commonhold association, better rights for individual unit-holders against decisions of the association, and a tighter standard form of Commonhold Community Statement. The recommendations are aimed at fixing the practical problems that have kept commonhold off the market for two decades.
The draft Commonhold and Leasehold Reform Bill
The government has committed to legislation that would implement the Law Commission proposals and make commonhold the default for new flats. A draft Commonhold and Leasehold Reform Bill is in development. The Leasehold and Freehold Reform Act 2024 deliberately did not include commonhold; the policy was always to deal with it in a separate Bill. As of 2026 no commonhold Bill has been introduced to Parliament, and there is no confirmed timetable.
What is actually likely
For new flats, commonhold is the direction of travel and there is real political agreement that it should become the default. For existing flats, conversion is harder. Even with a more workable conversion route, the practical step of getting a majority of leaseholders to agree, fund the legal costs, and run the conversion process is a serious piece of work. Most existing leasehold blocks are likely to remain leasehold for many years even if conversion becomes legally easier. The realistic picture is two parallel systems running alongside each other for the foreseeable future, with the leasehold stock gradually shrinking as new blocks come through as commonhold.
Commonhold and Selling Your Flat
For almost every reader of this guide, this section is academic. The number of commonhold flats in England and Wales remains tiny, so almost no flat sale is a commonhold sale. The picture below is what applies if your flat is one of the small number that is commonhold, or if you are selling a flat in a building that might convert in future.
Selling a commonhold unit today
A commonhold sale is closer in feel to selling a freehold house than to a leasehold flat sale. There is no lease term to disclose, no marriage value to model, no ground rent to declare. The conveyancing focuses on the commonhold association: the Commonhold Community Statement, the association's accounts, the position on the commonhold contribution, and any rules in the statement that affect the buyer's plans (subletting, alterations, pets). Some conveyancers will be less familiar with commonhold; a solicitor with relevant experience is worth seeking out.
Selling a leasehold flat while reform is pending
If your flat is leasehold today, a future commonhold reform does not change your current sale. The flat is leasehold and the sale operates under the leasehold rules. Buyers and their lenders will not factor in a possible future conversion when valuing the flat. If you are weighing up whether to wait for the commonhold reforms before selling, the answer is the same as for the wider 2024 Act reforms: there is no confirmed timetable, and waiting is a real gamble.
How commonhold compares to share of freehold
From a day-to-day perspective the two look similar: in both cases the residents run the building between them and there is no outside freeholder taking ground rent. The legal structure is different. A share-of-freehold flat is still on a lease, with all the lease mechanics (term, possible future extension, lease rules). A commonhold flat has no lease at all. For a buyer, share of freehold is reassuring because it is well understood; commonhold is reassuring because it is the cleanest structure of the three, but it is still less familiar to many in the market.
Relevant Legislation
Commonhold is a creature of statute. The framework sits in one Act of Parliament and one set of regulations, with reform on the way.
The Commonhold and Leasehold Reform Act 2002, Part 1 created commonhold. It defines what a commonhold building is, what a commonhold unit is, what the commonhold association does, and how the Commonhold Community Statement works. Part 1 of the Act came into force on 27 September 2004 and has been in force ever since.
The Commonhold Regulations 2004 set out the detailed rules: the prescribed form of the Commonhold Community Statement, the procedure for registering a new commonhold, the workings of the commonhold assessment, and the powers and duties of the association. The regulations are unusually prescriptive, and the rigidity of the prescribed form is one of the things the Law Commission's reform proposals would relax.
The Leasehold and Freehold Reform Act 2024 did not touch Part 1 of the 2002 Act. The policy was always to deal with commonhold reform in a separate Bill once the Law Commission's recommendations could be properly reflected in the legislation.
A draft Commonhold and Leasehold Reform Bill is in development, intended to implement most of the Law Commission's 2020 recommendations and to make commonhold the default for new flats. No Bill has yet been introduced to Parliament and there is no confirmed timetable.
Further Reading
Two related guides sit alongside this one: the comparison of the three forms of flat ownership, and the wider state of leasehold reform.
Frequently Asked Questions
Commonhold is an alternative to leasehold for flats in England and Wales. Each flat (called a commonhold unit) is owned outright on a freehold basis, rather than on a lease for a fixed number of years. The shared parts of the building (the entrance, stairs, lifts, roof, exterior walls) are owned and managed by a commonhold association, a company that all the unit-holders are members of. There is no outside freeholder, no ground rent, no lease term that needs extending, and no fixed end date for ownership.
Leasehold gives you the right to use the flat for a fixed term under a lease granted by a separate freeholder. Commonhold gives you outright ownership of the flat with no fixed term and no separate freeholder. With leasehold, the term shortens year by year and the lease eventually needs extending. With commonhold, there is no term at all: ownership is permanent. With leasehold, you pay ground rent to the freeholder, and service charge to whoever manages the building (often the freeholder or their managing agent, sometimes a separate management company). With commonhold, there is no ground rent, and the running costs of the building are paid as a commonhold contribution into the association the owners run themselves.
Share of freehold sits inside the leasehold system. The leaseholders own the freehold of the building between them, through a company, but each flat is still held on a lease underneath. The leases still have a term, the leases can still need extending in time, and the lease rules still apply. Commonhold replaces the lease structure altogether. Each unit is owned outright and there is no lease at all. The day-to-day experience can feel similar (residents running the building between them) but the underlying legal structure is fundamentally different.
Three reasons. Developers found leasehold more profitable, because the freehold could be sold on as an investment generating ground rent income. Mortgage lenders were cautious about a tenure that was new and rare, which made commonhold flats harder to buy. And the law made converting an existing leasehold block to commonhold practically impossible, because it required 100 percent agreement from every leaseholder and the freeholder, which is almost never going to happen. As a result, only a small number of commonhold developments have been built since the system came into force in 2004.
Very few. Reliable counts have put the figure at fewer than around 20 to 30 commonhold developments across the whole of England and Wales since 2004. In a market with millions of leasehold flats, commonhold has remained a curiosity. The Law Commission's 2020 report on commonhold and the current government's commitment to reform are both responses to that very low take-up.
Not in any practical sense under the current law. Conversion is possible on paper, but it requires the freeholder and 100 percent of the qualifying leaseholders in the building to agree, plus any registered mortgage lenders. In a block of any size that threshold is almost never met. The Law Commission's proposals would lower the bar and create a workable conversion route, but those proposals are not yet law. Until they are, an existing leasehold block stays leasehold.
The current direction of policy is yes, but no Bill has yet been passed. The government has committed to bringing forward legislation, and the Law Commission has produced detailed proposals for a reformed commonhold regime including a workable conversion route. A draft Commonhold and Leasehold Reform Bill is in development. There is no confirmed timetable. Anyone buying a flat in England and Wales in 2026 is still almost certainly buying a leasehold flat.
Quite similar to selling a freehold house in some respects: there is no lease term to track and no ground rent to disclose. The complications come from the commonhold association. The buyer's solicitor will want to see the Commonhold Community Statement (the document that sets the rules for the building), the association's accounts and the position on the commonhold contribution (the equivalent of a service charge). Because commonhold is rare, some conveyancers will be less familiar with it; a solicitor with relevant experience is the right person to use.
Yes, but the choice of lender is narrower than on leasehold or freehold. Most of the major UK lenders will lend on commonhold flats, but some still require additional checks or stricter criteria, and a small number do not lend at all. A buyer's mortgage broker can identify which lenders are comfortable with commonhold and which are not. As commonhold becomes more common, the lender market is expected to broaden.
For most sellers, very little in the short term. Almost every flat sold in 2026 is still a leasehold flat, so the practical sale process, the buyer's lender choice, and the conveyancing all follow the existing leasehold rules. If a building does happen to be commonhold, the sale is workable but the conveyancer needs to be comfortable with the tenure. For sellers worrying about whether to wait for commonhold reform, the answer is the same as for the wider 2024 Act reforms: there is no confirmed timetable, and a sale today is governed by today's rules.