Commonhold Explained: What It Means for Shared Ownership
Find out how the UK Government plans to overhaul the current leasehold system with an alternative type of homeownership – commonhold – and what this means for Shared Ownership.
What Is Commonhold?
Commonhold is a type of property ownership for use in multi-occupancy buildings, such as apartment blocks. Unlike leasehold, which allows the leaseholder to own the property for a specified period while the freeholder owns the land the apartment is built on, commonhold gives each owner the freehold of their property indefinitely.
Additionally, commonhold offers a more democratic approach to community management, as homeowners collectively decide how budgets are spent and how their building is maintained through a ‘commonhold association’.
Commonhold ownership already exists in the UK but currently isn’t widely adopted. The government has proposed reforms to the model to make it a more viable alternative to leasehold.
Why Is the Government Moving Towards Commonhold?
The Leasehold and Freehold Reform Act became law in May 2024. The act proposes significant changes to the current leasehold system, including giving current leaseholders more rights and making commonhold the default tenure for new builds where possible. By implementing reforms, the government aims to make homeownership more transparent and to give current homeowners in multiple-occupancy buildings greater agency and control over decision-making.
Most recently, in March 2025, the government published a Commonhold White Paper detailing how the model would work. The proposed system aims to tackle escalating ground rents and service charges, and lease extensions, which can be costly for leaseholders.
The reforms also relate to the government’s broader Plan for Change, which it aims to fully implement by 2030. In terms of housing, the plan entails raising living standards, building 1.5 million new homes, and making the dream of homeownership possible for more working people.
How Would Commonhold Work with Shared Ownership?
As outlined in the Commonhold White Paper, the government’s proposed reforms will incorporate mixed-use developments, including those with Shared Ownership homes. This means that shared owners could benefit from the advantages that both commonhold tenure and the Shared Ownership scheme offer.
Potential Benefits for Shared Owners
The government’s reforms could allow current shared owners who have staircased to 100% to experience benefits including:
- Obtaining the right the right to buy the freehold (for houses).
- Having the right to extend the lease (for flats and houses) by 990 years with the ground rent capped at 0.1% of the property’s value in the lease extension calculation.
- There will no longer be a two-year ownership requirement to extend the lease.
- It could be cheaper to extend leases with 80 years or less remaining.
Challenges and Uncertainties
There is still more work to be done before the proposed commonhold model and leasehold reforms come into effect, as many of the provisions require further consultation on the finer details and for secondary legislation to be passed.
The government intends to publish a draft Bill in the second half of 2025 for pre-legislative scrutiny. It will provide further details on the revised commonhold model, such as how it would work with new Shared Ownership homes, allowing property agents and lenders to prepare for its widespread implementation.
Following this, the government will create a final Bill to implement the revised commonhold model. It’s yet to be confirmed when this could happen, but the government is committed to making commonhold the default tenure for flats by the end of this Parliament.
What Should You Do Next?
It’s not yet known how long it will be before leasehold reforms and the revised commonhold model are implemented. But you can stay up to date with the latest movements by visiting the commonhold and freehold and leasehold property sections on the government’s website.
If you’re considering buying a home in London, we’re here to help you achieve your dream. Explore our developments to find Shared Ownership apartments for sale across the city.
