What Is Commonhold and Could It Replace Leasehold for Flat Owners?

If you own a flat in England or Wales, you almost certainly own it on a leasehold basis. This means you own the right to occupy the property for a fixed term — typically 99, 125, or 250 years — while the freehold of the building itself belongs to a separate party. The leasehold system has been the subject of sustained criticism for decades, and recent legislation is beginning to change the landscape significantly.

This post explains what commonhold is, what the Leasehold and Freehold Reform Act 2024 introduced, and what the changes mean practically for flat owners in London — particularly those considering refurbishments or alterations to their property.

The Problem with Leasehold

The leasehold model creates an inherent tension between leaseholders and freeholders. Freeholders — or the managing agents they appoint — often have wide discretion over service charges, building maintenance, major works, and the terms on which leaseholders can make alterations to their own flats. Ground rents, once a relatively modest income for freeholders, were progressively inflated in new-build developments during the 2010s, creating significant financial burdens for leaseholders.

Equally problematic is the depreciation that comes with a shortening lease. A flat with a lease below 80 years becomes significantly harder to mortgage, and the cost of extending the lease rises sharply. These structural problems have made leasehold reform a political priority.

What Is Commonhold?

Commonhold is an alternative form of flat ownership that removes the freeholder from the equation entirely. Under commonhold, each flat owner owns their individual unit on a freehold basis — outright, with no lease, and with no fixed end date to their ownership. The common parts of the building (staircases, roof, external walls, shared services) are owned collectively by a Commonhold Association, a company in which every flat owner is automatically a member.

Decisions about the building are made collectively by the Commonhold Association, according to a Commonhold Community Statement that sets out each owner's rights and obligations. There is no landlord, no ground rent, and no lease.

Commonhold was introduced in England and Wales by the Commonhold and Leasehold Reform Act 2002, but it was almost never used in practice. Developers continued to build and sell on leasehold terms, and lenders were unfamiliar with commonhold — making mortgages harder to obtain on commonhold properties.

The government's stated intention is now to make commonhold the default tenure for new flats and to create a clearer, more accessible route for existing leaseholders to convert.

The Leasehold and Freehold Reform Act 2024

The Leasehold and Freehold Reform Act 2024 is a significant piece of legislation, though not all of its provisions are yet fully in force. Key elements include:

Ground rent restrictions. From June 2022, ground rents on new residential leases were banned under the Leasehold Reform (Ground Rent) Act 2022 — a separate, earlier piece of legislation. The 2024 Act builds on this.

Lease extension rights. The Act substantially improves leaseholders' rights to extend their lease. The new standard term for a lease extension is 990 years (up from 90 years for flats under the previous legislation). Leaseholders with existing rights to extend will be entitled to extend on these significantly longer terms.

Removal of the two-year ownership requirement. Previously, leaseholders had to own their property for two years before they could apply to extend the lease or purchase the freehold. The 2024 Act removes this requirement.

Service charge transparency. The Act introduces greater transparency around service charges, requiring freeholders and managing agents to provide clearer information about how charges are calculated and applied.

Commonhold reform. The government has signalled further, more fundamental commonhold reform in subsequent legislation, with the Commonhold and Leasehold Reform Bill expected to take forward the conversion process for existing leasehold buildings.

What This Means for Flat Owners Considering Works

For leaseholders thinking about refurbishing or altering their flat, the tenure changes are directly relevant. Most leases require leaseholders to obtain a Licence for Alterations from the freeholder before carrying out any structural changes, M&E alterations, or significant internal works. This process often involves legal fees, landlord consent conditions, and in some cases a structural or technical review.

If commonhold conversion becomes more accessible and widely adopted, the Commonhold Association (rather than an individual freeholder) becomes the approving body for alterations to individual units. The decision-making process may become more transparent and collectively accountable, though it will still require proper process and professional input.

For the time being, leaseholders undertaking refurbishments should ensure they understand their lease obligations, obtain any required consents, and work with contractors who are experienced in the licensed alterations process.

Working with Your Building's Ownership Structure

At RCB Design & Build, we regularly work with flat owners and freeholders on licensed alterations and full flat refurbishments. We understand the additional layer of consent and coordination that leasehold projects require, and we help clients navigate that process professionally — from initial consent applications through to compliant delivery.