Government Publish Commonhold Tenure Update

On 3rd March 2025, the Government published a Commonhold White Paper detailing their plans for the tenure, including the impacts on leasehold flats. The aim of the paper is to reinvigorate commonhold,  attempting to make it the default tenure.

The new White Paper sets out the government’s plans for how they will reform the commonhold regime, including how it should operate in the future and how it will impact consumers and the wider property industry.

The plan is to replace long leasehold tenure and, going forward, developments that contain flats will be commonhold by default. Introduced in 2004, under commonhold tenure, each unit in a development is owned outright and communal areas are held in shared ownership through a commonhold association. Commonhold associations are usually limited liability companies who are responsible for creation a commonhold community statement (or CCS). The CCS will usually include the definition of the extent of the property, including boundaries. It will also set out certain rights and reservations from which the property may benefit.

Whilst there are of course wider considerations for the property industry, this update specifically raises some issues within property development, especially considering transactions that might include mixed use buildings or complex estate plans. The government have suggested three key updates, amongst others, in relation to development.

Firstly, the introduction of sections within developments to allow for separate management of different areas and groups of units. This will enable a commonhold association to apportion payments for rent, service charges and other sums due. The plan is for these sections to be set out at the beginning of the development, when initial plans are being drawn up.

Secondly, the government have pledged they will allow certain permitted leaseholds to remain, including shared ownership leases, equity release and home purchase plans. These plans include the introduction of an exemption to the existing ban on residential leaseholders granting leases over seven years.

Finally, the government plans to build-in greater flexibilities around development rights by allowing developers to determine which rights they need include in the CCS.  As part of this they will also try to clarify the procedure for the handover process to the unit holders after development.

The government have said that they will consult further on these plans and aim to provide a clearer, more practical update later this year.

Read the full update here: Commonhold White Paper: The proposed new commonhold model for homeownership in England and Wales - GOV.UK