If you’re buying a flat or researching property ownership, you might have come across the term commonhold. But what is it, and how does it compare to traditional leasehold?
In this guide, we break down commonhold in plain English, explain how it works, and explore the key differences in the commonhold vs leasehold debate.
What is commonhold?
Commonhold is a form of property ownership introduced in England and Wales that allows homeowners to own their individual flat outright, forever, while also sharing ownership and responsibility for the communal parts of the building with the other flat owners in the building.
In simple terms:
- You own your flat freehold (no lease that might need extending).
- You jointly own and manage the shared parts of the property with the other owners.
- There is no landlord or freeholder making decisions without your input.
This structure was created as a fairer alternative to leasehold, which many have criticised as complex and costly.
How does commonhold work?
In a commonhold building:
- Each property is called a “unit”, and purchasing a unit makes you a “unit owner”.
- Shared areas (such as hallways, roofs, gardens, and lifts) are known as “common parts.”
- All unit owners are entitled to become members of a Commonhold Association, which is responsible for managing the building.
- There is no ground rent and no lease that expires.
The Commonhold Association:
- Maintains and insures the building.
- Collects contributions from owners to cover shared costs.
- Makes collective decisions through voting.
- Must have at least two directors. These can be unit owners or external professionals.
- Can appoint a managing agent if the members choose to do so.
What’s the difference between commonhold and leasehold?
Understanding commonhold vs leasehold is important if you’re deciding what type of property to buy or whether to convert your existing property.
- Ownership Length
Commonhold: You own your property indefinitely.
Leasehold: You own the property for a fixed number of years (e.g. 99 or 125 years). As the lease shortens, the property’s value often drops unless you pay for an extension.
- Ground Rent
Commonhold: There is no ground rent to pay.
Leasehold: It is likely you will be required to pay ground rent to a freeholder.
Escalating ground rents have frustrated many leaseholders and recent Government leasehold reforms aim to address this.
- Control and management
Commonhold: Owners jointly control management decisions through the Commonhold Association.
Leasehold: A freeholder or managing agent often exercises control, with leaseholders having limited influence over decisions and costs.
- Long-term costs
Commonhold: Costs are shared between unit owners and set out in a Commonhold Community Statement (CCS).
Owners must still contribute toward maintenance, insurance and management costs, similar to service charges in leasehold buildings.
Leasehold: Costs may include service charges, ground rent, permission fees, and other charges. These can rise over time and may be outside the leaseholder’s control.
Leasehold reform and the move toward commonhold
The UK Government has proposed major reforms aimed at addressing longstanding issues with leasehold ownership.
As part of the Draft Leasehold and Commonhold Reform Bill (published in 2026), the Government has proposed that commonhold should become the default form of ownership for most new flats in England and Wales.
These proposals are not yet law and remain subject to consultation and Parliamentary review. The details may change before legislation is finalised.
One key proposed change is making it easier for current leaseholders to convert their buildings to commonhold.
Under current law, converting to commonhold needs agreement from all leaseholders, lenders, and the freeholder. This is often hard to obtain. The draft law suggests lowering this requirement so conversion could move ahead with majority support, around 50%.
This change could remove a major barrier to adopting commonholds and could give flat owners a simpler way to move away from leasehold.
Other proposed changes within the bill include:
- Capping ground rents.
- Banning new leasehold flats.
- Making lease extension easier and cheaper.
Why was commonhold introduced?
Commonhold was designed to modernise property ownership in England and Wales. Many countries already operate similar models (like strata in Australia or condominium ownership in North America). The goal was to:
- Remove unfair leasehold practices and costs.
- Give homeowners greater control.
- Reduce ground rent.
- Provide permanent ownership of flats.
Despite its benefits, commonhold has seen low use since it was introduced in 2002. The new reforms aim to encourage wider adoption of the tenure.
Is commonhold better than leasehold?
Whether commonhold is a better option for you depends on your priorities:
Commonhold may suit you if:
- You want permanent ownership and control of your property.
- You prefer collective control over management.
- You want to avoid ground rent and the challenges and costs of lease extensions and service charges.
Leasehold may suit you if:
- You prefer a structure where management is largely handled by a freeholder or appointed managing agent.
- You want to be more hands-off with maintenance decisions.
Both systems still involve shared costs for maintaining communal areas in blocks of flats. The key difference lies in who has ownership and control over the building, rather than whether costs exist.
It has been argued that commonhold is fairer and more transparent than leasehold. This is especially true as reforms aim to make conversion easier.
As the UK reviews leasehold law and considers expanding commonhold, it is vital to understand both systems. If you plan to buy, sell, or convert property, this matters even more.
