Commonhold Reform Set to Reshape Future of Leasehold Ownership

The government has released a white paper setting out sweeping changes to leasehold ownership, signalling a move to make Commonhold the default tenure for newly built flats. The revised framework will accommodate all forms of development, including complex mixed-use schemes, and will allow for shared ownership homes to exist within a Commonhold structure.

According to the Royal Institution of Chartered Surveyors, the new rules will provide greater flexibility around development rights, offering developers the confidence to proceed while maintaining essential protections for homebuyers. Mortgage lenders are also set to benefit, with enhanced safeguards to protect their interests. These include mandatory public liability insurance, structured reserve funds, and increased oversight by Commonhold unit owners, ensuring financial resilience and helping to keep service costs within reasonable bounds.

The management of Commonholds will also be refined. New provisions will introduce clearer processes for appointing directors, set defined standards for maintenance and repairs, and require the use of reserve funds as standard practice. There will also be improved clarity on how residents can amend local regulations governing the day-to-day running of their buildings, along with enhanced protections for when issues arise.

A new statutory Code of Practice will provide clear guidance on how costs are to be distributed, offering greater transparency and peace of mind to homeowners.

The government has further confirmed its intention to strengthen the regulation of managing agents. In addition, a formal consultation is planned for later in 2025, which will consider a ban on the creation of new leasehold flats and examine how best to implement this change across the sector.

At Rawlinson Gold Pinner, we welcome these developments, which represent a thoughtful and progressive step forward. Clarity, accountability and long-term affordability remain essential pillars for homeowners and investors alike, and this new direction may well set the tone for a more balanced and transparent property landscape.