For most people buying a flat in England and Wales, leasehold has long been the familiar form of ownership.

That could change in the years ahead. The Government wants commonhold to become the standard form of ownership for most new flats and has published draft legislation setting out how a reformed commonhold system could work.

Commonhold is not new. It has existed in England and Wales for more than 20 years, but very few developments have adopted it. Proposed reforms are intended to address some of the reasons for that limited uptake and make commonhold suitable for a much wider range of residential developments.

While those reforms are still progressing, buyers and existing flat owners may increasingly hear the term commonhold alongside leasehold.

So, what is the difference between the two, and what could a wider move towards commonhold mean for homeowners?

How does leasehold ownership work?

When you purchase a leasehold property, you acquire the right to own and occupy it for the period set out in the lease.

That period can be very long, but it is not unlimited. The freehold of the building or land is owned separately, usually by a landlord or freeholder.

The lease is the central legal document governing the relationship. It will usually set out matters including:

• the length of the lease;
• responsibility for repairing and maintaining the property;
• contributions towards the upkeep of shared areas;
• restrictions affecting the use of the property;
• arrangements for insuring the building;
• rights over communal areas; and
• the responsibilities of the landlord and leaseholder.

For example, a lease may contain restrictions on alterations, subletting or keeping pets.

Leaseholders will also commonly contribute towards the cost of maintaining and managing the building through service charges.

Some existing leases require ground rent to be paid to the landlord. Ground rent has, however, already been prohibited for most new residential leases granted since the Leasehold Reform (Ground Rent) Act 2022 came into force.

Because leases can contain different provisions, two apparently similar flats may have quite different legal and financial arrangements.

What is commonhold?

Commonhold takes a different approach.

Instead of owning a lease for a fixed period, the owner holds the freehold of their individual flat, known as a commonhold unit. There is no expiry date attached to that ownership.

The shared parts of the development, such as the roof, hallways, gardens, lifts and other communal facilities, are owned and managed by a commonhold association.

Every unit owner automatically becomes a member of that association.

Rather than each flat being governed by an individual lease, a commonhold development has a Commonhold Community Statement. This establishes the rights and responsibilities applying across the development and sets out how the commonhold should operate.

Individual developments can also have local rules covering matters relevant to that particular building.

The result is a different ownership structure. There is generally no separate third-party landlord sitting between the individual homeowners and the management of the building.

Is commonhold the same as owning a share of the freehold?

Put simply, no.

A flat advertised with a “share of freehold” is usually still a leasehold property. The buyer owns the lease of their individual flat while also holding an interest in the company or arrangement that owns the building’s freehold.

This can give flat owners greater involvement in how their building is managed, but the individual leases remain in place and continue to regulate each property.

Commonhold removes that underlying leasehold structure. The flat itself is owned on a freehold basis and the commonhold framework has been specifically designed to deal with the ownership and management of buildings containing several separate properties.

What are the main differences between leasehold and commonhold?

Perhaps the most obvious distinction is the length of ownership.

A lease has a fixed term. Depending on its remaining length, an owner may eventually need to consider extending it. A commonhold unit is freehold, so there is no lease term to run down or extend.

Management also works differently.

Under a traditional leasehold arrangement, responsibility for managing the building may sit with the freeholder or a managing agent appointed by them. Leaseholders have various statutory rights relating to management and service charges, but they do not necessarily make the decisions themselves.

Under commonhold, the unit owners collectively form the commonhold association and have voting rights over the way the building is managed.

This does not necessarily mean homeowners would personally have to arrange every repair or manage the building themselves. A commonhold association could appoint a professional managing agent to deal with day-to-day management.

The important distinction is that the agent would ultimately be appointed on behalf of the commonhold association and accountable to the unit owners.

Would commonhold remove service charges?

A move to commonhold would not remove the cost of maintaining a shared building.

Roofs still require repair, communal areas need maintaining, buildings must be insured and facilities such as lifts need servicing and replacing.

Commonhold owners would therefore contribute towards shared expenditure through commonhold contributions rather than traditional leasehold service charges.

Under the proposed framework, unit owners would have a greater role in approving budgets and deciding how the building's money is spent.

The reforms also envisage reserve funds being used to prepare for significant future expenditure.

For example, rather than owners suddenly facing the full cost of replacing a lift when it reaches the end of its useful life, contributions could be built up over a longer period.

The precise amount each owner contributes may also differ where only certain properties benefit from a particular facility. Proposed changes are intended to make it possible for costs relating to facilities such as parking areas, lifts or other amenities to be allocated to the owners who use them.

Commonhold therefore changes who controls and agrees shared expenditure, rather than eliminating that expenditure.

Would owners have more say over the rules of their building?

Potentially, yes.

Leasehold restrictions are contained within individual leases and changing those leases can be complicated, particularly where amendments are required across an entire development.

Commonhold uses a more standardised framework.

The Commonhold Community Statement provides the underlying rules, while local rules can address matters specific to an individual development.

These might include the use of communal spaces or particular restrictions affecting residents.

Proposed reforms would allow unit owners to vote on changes to local rules, subject to the required level of support and protections for owners who could be unfairly affected by a decision.

This is intended to make the management arrangements more adaptable as a building and the needs of its residents change over time.

It also means that commonhold ownership comes with a degree of collective responsibility. Greater involvement in decisions can require owners to engage with questions about budgets, repairs, management and the rules applying to their development.

Why is commonhold not already widely used?

Commonhold was introduced through the Commonhold and Leasehold Reform Act 2002, with the system becoming available in 2004. Its use since then has been extremely limited.

The Law Commission examined the reasons for this and published recommendations in 2020 aimed at making commonhold a more workable option.

Among the issues identified were difficulties using the original commonhold model for larger or more complicated developments, including mixed residential and commercial buildings and developments involving shared ownership.

Leasehold was also already firmly established. Developers, lenders, conveyancers and managing agents were familiar with the system and there was little commercial incentive to adopt a different model.

The Government's proposed reforms seek to address these barriers, including making commonhold more suitable for mixed-use developments, shared ownership and developments built in different phases.

What is the Government proposing?

The Government published its Commonhold White Paper in March 2025 and followed this with the Draft Commonhold and Leasehold Reform Bill in January 2026.

Its longer-term intention is for commonhold to become the default form of ownership for most new flats.

A separate consultation considered how a ban on selling most new flats as leasehold could operate, including possible exemptions and transitional arrangements. That consultation closed in April 2026.

The proposals would generally cover newly built flats as well as certain newly created flats, such as properties resulting from the conversion of a house or commercial building.

There are likely to be exceptions, and the precise scope and timing of any ban will depend on the legislation ultimately approved by Parliament.

Importantly, the proposed ban has not yet taken effect.

As at September 2026, the Government's final legislation has yet to complete the parliamentary process.

What would happen to existing leasehold flats?

Existing leasehold flats would not automatically become commonhold.

Owners would continue to be able to sell existing leasehold properties, and existing leases would remain relevant.

Separate leasehold reforms are already being introduced or proposed, including changes affecting lease extensions, service charge transparency, ground rents and other leaseholder protections.

The Government also wants to make it easier for groups of existing leaseholders to choose to convert their building to commonhold.

Under the draft proposals, the level of leaseholder support required to begin a conversion would be reduced significantly from the present requirement for unanimous agreement.

Conversion would nevertheless be a separate legal process. Existing owners should not assume that their property will simply change from leasehold to commonhold if the new legislation is introduced.

What should buyers consider when purchasing a flat?

The legal structure of a flat affects more than the description appearing on the estate agent's particulars.

For a leasehold purchase, your conveyancer will need to consider matters including the remaining lease term, service charge arrangements, management information, building insurance, restrictions contained in the lease and any planned major works.

If commonhold becomes more widely used, buyers will need to understand a different set of documents and arrangements.

That is likely to include reviewing the Commonhold Community Statement and any local rules, understanding the contributions payable towards shared costs, checking reserve fund arrangements and considering how the commonhold association is managed.

In either case, buyers need to understand both what they own individually and the obligations they share with other owners in the building.

Could commonhold become the normal way to buy a flat?

That is certainly the Government's stated intention for most newly created flats.

However, changing a form of property ownership that has been used for generations will involve more than passing legislation. Developers, mortgage lenders, managing agents, conveyancers and buyers will all need to become familiar with the new framework.

Leasehold is also unlikely to disappear quickly. Millions of existing leasehold properties will remain, even if commonhold becomes standard for future developments.

For buyers, this could eventually mean seeing two quite different forms of flat ownership in the market: existing properties continuing to be bought and sold as leasehold, alongside a growing number of new commonhold homes.

Understanding which structure applies, and the rights and responsibilities that come with it, will remain an important part of buying a flat.

The Conveyancing team at stevensdrake advises buyers and property owners on residential property matters, including leasehold purchases and leasehold enfranchisement. If you are considering buying a flat or have questions about the ownership arrangements affecting your property, the team can help you understand the legal position and what it means for your transaction.

This article is intended to provide general information only and does not constitute legal advice. Commonhold and leasehold reform remains subject to legislative change. Advice should be obtained in relation to your individual circumstances.