Pillar Guide · Updated July 2026
UK Commonhold vs Leasehold: A Complete Guide for 2026/27
Leasehold ownership has been criticised for decades over ground rent scandals, expiring leases and unaccountable freeholders — and the government has now committed to making commonhold, a fairer freehold-style alternative, the default tenure for new flats. This guide explains exactly how commonhold differs from leasehold, why it has remained rare since its introduction in 2002, the current reform agenda, and what it practically means for anyone buying or already owning a flat.
How the Two Structures Differ
Under leasehold, a buyer purchases a lease — a right to occupy a specific flat for a fixed number of years — granted by a freeholder who owns the underlying land and building. Because a lease is a fixed-term asset, its remaining length steadily decreases every year, and the leaseholder generally has no automatic vote or control over how the freeholder manages the building or sets service charges (unless the leaseholders collectively own the freehold or a resident management company).
Under commonhold, each flat owner owns their individual unit outright as a form of freehold — permanently, with no lease and no expiry date — while jointly owning and controlling the shared parts of the building (structure, roof, communal halls, lifts) through a commonhold association that every unit owner automatically belongs to and has a vote in.
The practical effect is that commonhold removes the fundamental structural weakness of leasehold — a diminishing, third-party-controlled asset — and replaces it with a form of direct, permanent, jointly governed ownership more closely resembling how flats are typically owned in many other countries.
Ground Rent and Lease Expiry
Two of the most criticised features of leasehold ownership simply do not exist under commonhold. First, ground rent — an annual payment to the freeholder for no service in return, which in some notorious cases escalated rapidly under doubling clauses and trapped leaseholders in unsellable flats — has no equivalent under commonhold, since there is no separate freeholder collecting rent from unit owners.
Second, lease expiry and the associated cost and complexity of lease extensions do not arise under commonhold, because unit ownership is permanent freehold ownership rather than a diminishing fixed-term interest. Leaseholders with a short remaining lease term often face expensive premiums to extend, can find their property harder to mortgage or sell below a certain remaining length (commonly around 80 years), and can ultimately lose the flat back to the freeholder if the lease is allowed to expire without extension or enfranchisement — none of which applies under commonhold.
Why Commonhold Has Remained Rare
Commonhold was introduced by the Commonhold and Leasehold Reform Act 2002 with the explicit intention of offering a fairer alternative to leasehold flat ownership, but take-up has been remarkably low — only a small number of commonhold developments exist across England and Wales more than two decades later, against millions of leasehold flats.
Several factors are commonly cited: developers had a clear financial incentive to retain the freehold and the associated ground rent income stream rather than sell commonhold, mortgage lenders were initially cautious about a new and unfamiliar tenure, there was no straightforward legal mechanism to convert an existing leasehold block to commonhold without near-unanimous leaseholder agreement, and general unfamiliarity among conveyancers, surveyors and buyers meant commonhold transactions were often slower and more complicated to complete than routine leasehold ones.
This combination of weak commercial incentive for developers and practical friction for everyone else in the transaction chain meant commonhold never achieved the critical mass needed to become mainstream, despite two decades of availability under the law.
The Reform Agenda
The Leasehold and Freehold Reform Act 2024 marked a significant step in a broader government reform programme aimed at reducing the prevalence and problems of leasehold ownership, including measures on ground rent, service charge transparency and enfranchisement (lease extension and freehold purchase) costs. Alongside this, the government has committed to a further legislative programme intended to make commonhold the default tenure for new flats, effectively phasing out the sale of new leasehold flats over time.
A promised further Leasehold and Commonhold Reform Bill is intended to strengthen and modernise the commonhold legal framework itself — addressing longstanding technical weaknesses such as funding for major works, insurance arrangements, and how commonhold associations handle disputes or financial difficulty — to make the tenure more robust and lender-friendly before it becomes the default option developers must offer. As of 2026/27, leasehold remains the dominant tenure in practice, with the shift to commonhold as the default expected to unfold gradually over the following years rather than immediately.
How a Commonhold Is Managed
Every unit owner in a commonhold development is automatically a member of the commonhold association, a company limited by guarantee that owns and manages the building's common parts. The association operates under a Commonhold Community Statement — a foundational document registered against the whole site — setting out each unit owner's rights, obligations and proportionate share of running costs.
Major decisions, such as approving significant repair or improvement works or amending the community statement, typically require a qualified majority vote among unit owners, giving residents direct democratic control over how their building is run. This is a structural contrast to leasehold, where decisions ultimately rest with a third-party freeholder (or, where leaseholders have collectively bought the freehold or set up a resident management company, with a company structure that mimics some but not all of commonhold's built-in governance).
Converting Leasehold to Commonhold
Conversion from leasehold to commonhold is legally possible but has almost never happened in practice, because current law requires the freeholder's cooperation and, in most cases, the unanimous or near-unanimous agreement of every leaseholder in the building — an extremely high bar in blocks with dozens or hundreds of separately owned flats, each with their own priorities and willingness to engage with a complex legal process.
Reform proposals under discussion have looked at ways to lower this barrier, potentially allowing conversion with a qualified majority rather than unanimous consent, similar to the threshold used for collective freehold enfranchisement. As of 2026/27, however, the conversion route remains a largely theoretical option for existing leasehold buildings rather than a realistic near-term path for most leaseholders.
Mortgages on Commonhold
Mainstream mortgage lenders do offer products on commonhold properties, though the very small number of commonhold developments built since 2002 has meant many lenders, conveyancers and mortgage brokers have limited hands-on experience with the tenure compared to routine leasehold transactions.
As the government's reform agenda increases the volume of new commonhold developments, lender familiarity, product availability and processing speed are all expected to improve over time. In the meantime, buyers considering a commonhold property should confirm early in the process that their chosen lender and conveyancer are comfortable acting on the tenure, to avoid delays later in the transaction.
What This Means If You Are Buying
Leasehold remains overwhelmingly the dominant tenure for existing flats, and the shift toward commonhold as the default for new-build flats is being phased in gradually rather than retrospectively applying to properties already sold as leasehold. A leasehold flat with a long remaining lease (typically 125 years or more if recently built), a modest or peppercorn ground rent, and a well-run freeholder or resident management company remains a perfectly reasonable purchase.
Buyers should focus on the specific lease terms, remaining length, ground rent escalation clauses and service charge history of any individual property rather than avoiding leasehold outright as a category, while keeping an eye on the growing availability of new-build commonhold developments as a genuine alternative over the coming years as the reform agenda takes effect.