Commonhold vs Leasehold in 2026: What Is Changing?

The debate around commonhold vs leasehold 2026 has moved well beyond a question of which type of property ownership is better. The UK Government is now working towards making commonhold the default form of ownership for new flats in England and Wales, while also proposing major changes to the existing leasehold system.

That makes 2026 an important year for flat owners, prospective buyers, developers, freeholders and Resident Management Companies. But there is an important distinction to make at the beginning.

Commonhold has not suddenly replaced leasehold in 2026. Leasehold remains the dominant form of ownership for flats in England and Wales. However, the Government has published a draft Commonhold and Leasehold Reform Bill, consulted on banning leasehold for most new flats and is developing a new legal framework intended to make commonhold much more widely used. So, what is the difference between commonhold vs leasehold 2026, and what could the reforms mean if you own or are thinking about buying a flat?

Your Home Property Management works with RMCs, leaseholders and residential developments across London, Kent and Essex. If you are reviewing your building’s management arrangements or considering a change of managing agent, contact us for a free, no-obligation consultation.

What Is Leasehold?

Leasehold is a form of property ownership where you purchase the right to occupy a property for a defined period under a lease. For flats, the lease can commonly run for many decades or even hundreds of years, but it is still a time-limited form of ownership. The freeholder retains ownership of the building or land, while the leaseholder owns the leasehold interest in their individual property.

Depending on the lease, leaseholders may have to contribute towards:

• Maintenance and repairs
• Building insurance
• Communal services
• Management costs
• Major works
• Other costs permitted by the lease

Leasehold has been the usual way of owning flats in England and Wales for many years. However, the Government has argued that the system can leave homeowners with less control over their building and costs than they should have. Its 2025 Commonhold White Paper described commonhold as an alternative designed to give homeowners greater control over their buildings and shared costs.

What Is Commonhold?

Commonhold is different because it gives flat owners freehold ownership of their individual unit. There is no fixed lease term that eventually expires. Instead, the owners collectively control the shared parts of the building through a commonhold association. The commonhold association is responsible for managing the common parts, while the individual unit owners have ownership of their own properties.

That changes the relationship between ownership and management. Under a commonhold structure, the people who own the flats also have a direct role in controlling the building.

Commonhold vs Leasehold: The Main Difference

The easiest way to understand leasehold vs commonhold is to look at who owns the property and who controls the building.

Feature	Leasehold	Commonhold
Individual flat	Leasehold interest	Freehold ownership
Ownership period	Fixed lease term	Indefinite
Third-party freeholder	Usually yes	No
Shared areas	Usually controlled through landlord/management structure	Owned and managed through commonhold association
Ground rent	May apply depending on lease and property	No ground rent
Management control	Depends on structure and rights	Owners collectively control commonhold association
Lease expiry	Yes	No
Decision-making	Can involve landlord/freeholder	Unit owners collectively make decisions
Managing agent	May be appointed by landlord/RMC/other structure	Owners can appoint a managing agent

The Government’s proposed commonhold model is specifically intended to give homeowners greater control over management, costs and shared facilities.

Why Is Commonhold Becoming More Important in 2026?

The Government has made commonhold a major part of its leasehold reform programme.

In March 2025, the Government published its Commonhold White Paper setting out its intention for commonhold to become the default tenure for new flats. Then, in January 2026, the Government published a draft Commonhold and Leasehold Reform Bill.

The draft legislation proposes to:

• Reinvigorate the commonhold model
• Make it easier for existing leaseholders to convert to commonhold
• Ban leasehold for most new flats
• Reform ground rents
• Remove forfeiture as the existing enforcement mechanism
• Give homeowners greater control over their properties

These are proposals within a draft Bill rather than rules that have all automatically become law. That distinction is crucial when discussing commonhold 2026.

Will Leasehold Be Banned for New Flats?

The Government is proposing to ban the use of leasehold for most new flats so that commonhold becomes the default. In January 2026, the Government launched a consultation specifically on moving to commonhold and banning leasehold for new flats. The consultation asked about:

• The scope of the proposed ban
• Possible exemptions
• When the ban should begin
• Transitional arrangements
• How the new commonhold framework should operate

The consultation closed on 24 April 2026. This means that someone buying a new-build flat should pay attention to the direction of travel, but should not assume that every new flat must already be sold as commonhold today. The precise implementation depends on legislation and the Government’s final approach.

What About Existing Leasehold Flats?

This is where things become more complicated. The proposed reforms are not simply about stopping developers from creating new leasehold flats. The Government also wants to make it easier for existing leaseholders to move towards commonhold where appropriate. The draft Bill is intended to make conversion to commonhold easier, although the practical process and requirements depend on the final legislation. 

Existing leaseholders should therefore not assume that they will automatically become commonholders. Leasehold properties remain leasehold unless the relevant legal process for changing the ownership structure is completed.

Is Commonhold Better Than Leasehold?

There is no universal answer. The Government strongly supports commonhold as a model that gives homeowners greater control, but whether it is better for a particular development depends on its structure, finances, owners and management requirements.

Commonhold has some obvious advantages.

Permanent ownership

Your individual unit is freehold rather than being tied to an expiring lease.

Greater control

Unit owners collectively control the commonhold association.

No ground rent

Commonhold ownership does not involve ground rent for the individual unit. 

Direct involvement in management

Owners have a direct role in decisions affecting the building.

No forfeiture

The Government’s proposed commonhold model removes the risk of forfeiture associated with leasehold ownership. But commonhold does not mean that owning a flat becomes maintenance-free. Owners still have to contribute towards the costs of maintaining communal areas and running the building.

What Are the Disadvantages of Commonhold?

Commonhold has existed in England and Wales since 2004, but it has not become the mainstream alternative that policymakers originally hoped it would be. The Government’s own White Paper acknowledges that the existing framework has limitations and needs significant reform before commonhold can operate effectively at scale. 

One reason is that commonhold requires owners to participate in the management of their building. That can be positive when owners are engaged and organised. But it can also create challenges when:

• Owners disagree about expenditure
• Some owners do not participate
• Major repairs are required
• Budgets are insufficient
• Professional management is needed
• The building has complex facilities

In other words, commonhold removes the third-party landlord structure, but it does not remove the responsibility of managing the building.

Can a Commonhold Association Appoint a Managing Agent?

Yes. Commonhold does not mean that every flat owner has to personally manage the building. The commonhold association can appoint professional support where appropriate.

This is particularly relevant for larger developments with lifts, communal gardens, complex maintenance requirements, compliance responsibilities or substantial service charge-style expenditure. The Government’s proposed model is intended to give commonholders greater control over the appointment and removal of managing agents. For property managers, this means the relationship may increasingly be directly with the homeowners’ organisation rather than a third-party freeholder.

What Happens to Service Charges Under Commonhold?

Commonhold does not mean there are no building costs. Flat owners will still have to contribute towards maintaining and operating shared areas. The difference is largely who controls the money and decisions.

Under the proposed commonhold model, homeowners collectively control the commonhold association and have greater influence over how the building’s costs are managed. The Government’s White Paper highlights democratic decision-making and greater control over costs as key benefits of commonhold. 

So if you are comparing commonhold vs leasehold 2026, don’t make the mistake of thinking:

Leasehold = service charges

Commonhold = no service charges 

That is not how it works. A commonhold development still has costs for repairs, insurance, cleaning, maintenance and other shared services.

What Is Happening to Leasehold in 2026?

Commonhold reform is happening alongside wider leasehold reform. The Government has already introduced the Leasehold and Freehold Reform Act 2024, while further reforms are being developed through the draft Commonhold and Leasehold Reform Bill.

The Government’s 2026 leasehold toolkit explains that reforms are being introduced through the 2024 Act and that further changes are planned through the draft legislation. The proposed changes include reforms relating to:

• Lease extensions
• Ground rents
• Forfeiture
• Service charges
• Managing agents
• Right to Manage
• Enfranchisement
• Commonhold conversion

Not every reform has the same implementation date. That is why leaseholders should avoid assuming that a proposal announced in 2026 is automatically a legal requirement today.

What Does This Mean If You Are Buying a Flat?

If you are considering buying a flat in 2026, ask whether it is leasehold or commonhold before committing to the purchase. For a leasehold property, look carefully at:

• Remaining lease length
• Ground rent
• Service charges
• Major works
• Management arrangements
• Restrictions in the lease
• Building insurance
• Any planned changes to the building

For a commonhold property, you should understand:

• The commonhold association
• Your obligations as a unit owner
• How communal costs are calculated
• The association’s rules
• Current maintenance requirements
• The financial position of the development
• How decisions are made

The ownership structure can have a significant impact on how the property is managed.

What Does Commonhold Mean for RMCs?

RMCs and commonhold associations are not the same thing, although both can involve resident-led control of a building. An RMC may operate within a leasehold development and can have responsibilities relating to management depending on the leases and structure of the property.

A commonhold association is an integral part of the commonhold ownership structure. This distinction matters for directors considering whether their building could eventually move towards commonhold. A conversion is not simply a matter of changing the name of the management company. It involves changing the legal structure of ownership and management.

Could Existing Leasehold Buildings Become Commonhold?

Potentially, yes. One of the Government’s stated objectives is to make it easier for existing leasehold developments to convert to commonhold. However, the practical process is not something that should be assumed from the headline alone.

The Government is still developing the detailed legal framework. The draft Bill published in January 2026 specifically aims to make conversion easier, but the final rules and implementation process remain important. If an RMC or group of leaseholders is considering commonhold conversion, specialist legal advice should be obtained before making decisions.

Commonhold vs Leasehold 2026: Which Is Better for Flat Owners?

For many people, the attraction of commonhold is straightforward: you own your flat as freehold, there is no expiring lease and homeowners collectively control the building. Leasehold, however, remains the established system and continues to apply to the overwhelming majority of existing flats. The practical question for an individual owner is therefore not simply whether commonhold is theoretically better.

It is:

Which ownership structure gives this particular development the best combination of security, control, financial transparency and effective management?

For a well-run leasehold development, professional management can still provide a good experience. For a commonhold development, owners still need to manage finances, maintenance and communal responsibilities effectively.

The ownership model matters, but good building management matters too.

If your RMC or residential development is reviewing its current management structure, Your Home Property Management can help assess your existing arrangements, service standards and management requirements. Contact us for a free, no-obligation management review.

The Future of Commonhold and Leasehold in 2026

The direction of travel is clear: the Government wants commonhold to become the standard ownership model for new flats while reforming the existing leasehold system. But commonhold vs leasehold 2026 is not yet a simple case of one system disappearing and another immediately taking over.

Leasehold remains the reality for millions of existing flat owners. At the same time, the Government has published a draft Bill, consulted on banning leasehold for new flats and is developing a new commonhold framework intended to give homeowners more control over their buildings. 

For existing leaseholders, the sensible approach is to understand the reforms without assuming that proposed changes are already in force. For RMCs and property managers, 2026 is a good time to review how buildings are governed, how service charges are managed and whether current management arrangements are ready for a changing leasehold landscape.

Frequently Asked Questions