Big changes could be coming to the way we buy flats in England and Wales and what CeMAP mortgage advisers should be aware of. The UK government has announced plans to phase out leasehold ownership for new-build flats, moving towards a “commonhold” system instead. But what exactly is commonhold – and how might it affect future homeowners?
What Is Commonhold Ownership?
In simple terms, commonhold allows flat owners to own their property outright, including a share of the building’s communal areas (like stairwells, gardens, and roofs).
This is different from the traditional leasehold model, where you technically only own the property for a set number of years, and the building remains under the control of a separate freeholder or management company.
In a commonhold arrangement:
- You own your individual flat forever (not just for the term of a lease, like 99 or 125 years).
- You automatically become a member of a commonhold association, responsible for managing shared spaces alongside your neighbours.
What Are the Benefits of Commonhold?
Switching to a commonhold system could bring several important advantages for buyers:
- True ownership: No lease expiry to worry about.
- Cost savings: No ground rents, and maintenance decisions are made jointly by owners.
- Community-driven management: Owners have a direct say in how their building is run.
- More attractive to buyers: Properties with freehold ownership tend to hold value better over time.
What Are the Challenges?
However, it’s not without potential hurdles:
- Legal and financial unfamiliarity: Many buyers, mortgage lenders, and developers are not yet comfortable with the commonhold structure.
- Management responsibilities: Owners must be willing to cooperate and participate in decisions about maintenance and repairs.
- Start-up difficulties: Setting up a well-run commonhold association will require guidance, education, and possibly new professional support services.
Mortgage lenders may also need time to adapt their criteria for commonhold properties, which could slow early adoption.
What Happens Next?
The government has indicated that it will legislate to mandate commonhold for new-build flats — but a timeline for implementation has not yet been finalised.
Experts are calling for widespread education efforts to help buyers, developers, solicitors, and lenders understand and embrace the new system.
If successful, this could mark the biggest shake-up in property law for a generation — bringing England and Wales closer to international norms, where freehold apartment ownership is the standard.
Final Thoughts
If you’re planning to buy a flat in the coming years, it’s important to stay informed about these changes.
While the move to commonhold could offer long-term savings and greater security, it will also require a new way of thinking about ownership and building management.
As always, when purchasing property, seek professional legal and financial advice to ensure you understand your rights and responsibilities under any new system.
As a qualified CeMAP Adviser your CPD is important and staying updated on changes like this is essential.