The Commonhold White Paper published on 3rd March 2025 presents the Government's vision for tackling the leasehold concern in England and Wales. The legislation itself was introduced in 2002 so the framework already exists, the wheel doesn't have to be reinvented and consequently future change could move at pace. Its intention is to address the challenges faced by leaseholders and to establish commonhold as the default tenure for flats and shared properties.
The commonhold model is designed to;
- Allow homeowners greater influence on the decision making process
- Give residents of a building the responsibility and ability to manage their building through a commonhold association making the building tailored to the needs of those people who live there
- Protect the long term value of the properties - a leasehold tenure can reduce the value of a property if the term is particularly short whereas a commonhold tenure will not have term limits, which will give greater peace of mind to property owners
Does this mean that leasehold properties will become unattractive to potential buyers?
Leasehold properties have been widely criticised over the years for numerous reasons including increasing ground rents, archaic legislation and a lack of control for the leaseholders. The re-introduction of the commonhold system which is designed to tackle these problems could put developers with existing sites utilising the leasehold tenure at a disadvantage on the free market, if plot buyers become concerned about the onward saleability of leasehold properties.
Our top tip in relation to commonhold properties; review your developments now and bear commonhold in mind on future site acquisitions. Could a new development accommodate commonhold in place of leasehold properties and would doing so give you a competitive sales advantage?
