Overview

• The UK government has announced plans to ban leasehold ownership for new flats, transitioning to a commonhold system widely used in other countries.
• Commonhold ownership allows flat owners to collectively own and manage the building, eliminating the need to pay ground rent or rely on third-party freeholders.
• Critics of the leasehold system cite rising service charges, unfair ground rents, and limited homeowner control as key issues driving the push for reform.
• The proposed changes will initially apply to new flats, while existing leaseholders may face challenges in converting to commonhold due to legal and financial complexities.
• Freeholders and some industry groups argue that commonhold could impose greater financial and managerial responsibilities on residents, particularly in large or complex buildings.