Has the time for commonhold finally arrived?

The UK is advancing reforms to establish commonhold as the preferred tenure for flats, addressing longstanding criticism of leasehold. Leasehold has been associated with diminishing asset value, limited homeowner control and opaque leaseholder charges. The government’s 2025 Commonhold White Paper sets out a plan to make commonhold the default tenure for new developments and limit new leaseholds. International experience, notably in Australia and Singapore where collective freehold ownership functions effectively at scale, suggests that commonhold is not a passing reform but become a permanent feature of the UK housing system.

The UK Reform Programme

Introduced under the Commonhold and Leasehold Reform Act 2002, commonhold saw limited adoption due to legal, operational, and commercial barriers. The 2025 reforms aim to overcome these by:

• Establishing commonhold as the default tenure for new multi-unit residential developments
• Enabling it to function for mixed-use and complex schemes
• Strengthening the Commonhold Community Statement (CCS) through statutory standardisation
• Improving governance, financial resilience, and dispute resolution

The objective is to create an owner-led system that provides permanence, transparency, and confidence for both purchasers and lenders.

Commonhold in Practice

Under commonhold, individual owners hold freehold title to their property, while common areas are collectively managed through a commonhold association. The CCS governs decision-making, cost allocation, maintenance responsibilities, and enforcement. Day-to-day management may be delegated to professional agents, reflecting lessons from Australia’s strata title system, where licensed strata managers routinely support owners’ corporations to maintain scale, transparency, and operational stability. Similarly, Singapore’s Management Corporation Strata Title (MCST) framework illustrates how clear statutory roles, fiduciary duties and specialist tribunals underpin effective governance while preserving owner autonomy.

Developer Leadership and Market Adoption

Developers are pivotal in establishing commonhold as a credible alternative to leasehold. By adopting commonhold proactively, they can structure governance, reserve funds and management arrangements to be transparent, operationally robust and lender-ready. International experience highlights the benefits of this approach. 

Early engagement with managing agents, lenders and legal advisors allows the CCS to provide certainty over contributions, maintenance and decision-making. Embedding professional management from the outset ensures operational stability and addresses historical concerns about volunteer-led governance.

Lender Confidence

Lender confidence is central to market adoption. A commonhold model underpinned by statutory clarity, enforceable financial obligations and professional management directly addresses the risks of governance failure, arrears, and deferred maintenance.

Examples from Australia show that lenders are comfortable supporting strata units with transparent management and reserve funds, while Singapore demonstrates that statutory enforcement and dispute resolution provide predictability and security. In the UK, similar structures can give lenders confidence, while offering purchasers permanent ownership, operational transparency, and control over their asset.

Risks and Challenges

International experience shows that collective ownership is not without risk. Underfunded reserve funds have led to deferred maintenance, special levies and owner disputes. Governance fatigue and low participation can concentrate decision-making in a small subset of owners or managing agents. Common risks include underfunded maintenance, disengaged governance, overreliance on volunteer directors, and conflicts in mixed-use developments.

A further challenge arises during the transition to commonhold as the default tenure for new developments while much of the existing housing stock remains leasehold. For a period, this will create a two tier system. Commonhold properties may be seen as more straightforward and appealing to buyers and lenders potentially affecting resale, valuation and mortgage availability of leasehold properties in the future.

Additional complexity arises in buildings with investment owners, overseas leaseholders or owners who are unwilling or unable to meet the cost or procedural requirements of conversion underlining the importance of clear policy communication, the creation of practical routes for leasehold conversion and safeguards to ensure that reform does not disadvantage existing leaseholders who are unable to participate.

Key Lessons for the UK

Comparative experience highlights several priorities for successful UK commonhold reform:

• Clear statutory governance to reduce reliance on voluntary participation
• Professional management embedded by design, particularly for complex or mixed-use schemes
• Mandatory financial planning and reserve funds to protect long-term asset value
• Robust enforcement and dispute resolution mechanisms
• Market-ready structures that inspire confidence among purchasers and lenders

By embedding these principles, the UK can avoid the challenges observed in other jurisdictions and deliver a credible, durable tenure.

Conclusion

The UK’s renewed commitment to commonhold offers the potential to replace leasehold with a fairer, more sustainable property model. Lessons from other jurisdictions such as Australia and Singapore demonstrate that collective freehold systems succeed when owner control is balanced with statutory governance, enforceable financial obligations, and professional oversight. With developers leading implementation, lenders engaged early, and risks addressed through regulation, commonhold has the potential to evolve from a policy ambition into a widely trusted and enduring tenure.