Government Publishes Commonhold White Paper, Signalling Major Leasehold Reforms
On 3 March 2025, the government published its much-anticipated Commonhold White Paper, which it terms the "beginning of the end" for the "feudal" leasehold system. The ambitious proposal aims to make commonhold the default tenure for new flats, to put homeowners in control of their buildings in their hands, and to simplify the process of converting existing leasehold blocks.
Under commonhold, owners keep the freehold interest in their own flat but share responsibility for communal areas through a democratic commonhold association—removing the third-party freeholder and removing ground rent in the process.
Critical Proposals of the White Paper
•Limit on New Leasehold Flats: Newly constructed flats would be sold in commonhold, bringing an end to the creation of new residential leaseholds.
•Easier Conversion: Existing leaseholders would have an easy process to switch to commonhold, removing some significant legal and financial barriers.
•More Owner Control: Building owners would take control of building management decisions, service charge budgets, and rules changes, breaking away from the traditional landlord-dominated model.
•Protection of Lenders: Mortgage lenders shall be given further legal certainty such that the model of commonhold is mortgageable and secure.
•Ongoing Reform: Ongoing interim reform by the government is aimed at simplifying the dispute over service charges and Lease extensions becoming more affordable while a full transition towards commonhold remains underway.
Potential Implications
•For Homeowners: Greater control, no ground rent, and shared decision-making on building upkeep.
•For Developers: New legislative forms to accommodate commonhold, particularly in mixed-use or complex developments.
•For Existing Leaseholders: An easier path to switch to commonhold, based on planned legislative changes to reduce costs and red tape.
CCS Law is closely monitoring the passage of these reforms. For more information, you can read the official government press release here:
Disclaimer: This article is intended for informational purposes only and does not constitute legal advice.
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