What Really Is Commonhold, and Is It Right for Your Building?
With the Government's latest leasehold reform proposals bringing commonhold back into the spotlight, many leaseholders, Resident Management Companies (RMCs), Right to Manage (RTM) companies and flat owners are asking the same question:
What exactly is commonhold, and is it actually better than leasehold?
A recent article published by Landlord Today, "Leasehold v Commonhold – A Direct Comparison", highlights the growing debate surrounding the future of flat ownership in England and Wales. The article explores the key differences between the two ownership structures and the potential benefits commonhold could offer homeowners in the years ahead. But while commonhold may sound like the perfect solution to long-standing leasehold frustrations, the reality is more nuanced. The right answer depends on your building, your residents, your finances and your long-term objectives.
What Is Commonhold?
Commonhold is a form of property ownership that allows flat owners to own their property outright on a freehold basis, while collectively owning and managing the shared parts of the building through a Commonhold Association. Unlike leasehold ownership, there is no diminishing lease term, no ground rent and no separate freeholder.
In simple terms:
You own your flat indefinitely (with no expiring lease)
Residents collectively own and manage the building (through a Commonhold Association)
Decisions are made by unit owners rather than an external landlord (with the support of a Managing Agent)
There are no lease extensions to worry about (as there is no fixed/expiring term)
Ground rents are removed from the ownership model (as the Commonhold also owns the building)
The Government's draft Commonhold and Leasehold Reform Bill aims to make commonhold the default ownership model for new flats and simplify the process of converting existing leasehold buildings.
Why Are People Interested in Commonhold?
Many leaseholders have become frustrated with:
Escalating service charges.
Ground rent liabilities.
Complex lease structures.
Lack of control over building decisions.
Difficulties extending leases.
Disputes with freeholders.
Commonhold seeks to address many of these concerns by placing control directly into the hands of property owners. For some developments, this could provide greater transparency, more democratic decision-making and improved long-term planning. However, ownership control comes with responsibility.
Commonhold Is Not a Magic Wand
One of the biggest misconceptions surrounding commonhold is that it automatically eliminates all of the challenges associated with managing a block of flats. It does not. Buildings still require:
Health and safety compliance.
Fire safety management.
Building maintenance.
Financial planning and reserve funds.
Contractor procurement.
Insurance management.
Service charge budgeting.
Resident communication.
Whether a building is leasehold, commonhold, RTM-managed or owned through an RMC, somebody still needs to ensure the building is run professionally and remains financially sustainable. In fact, many industry commentators have warned that resident-controlled buildings without professional support can struggle with governance, budgeting and long-term maintenance planning.
Could Commonhold Save Your Building Money?
Potentially, yes. For some developments, commonhold could:
Remove freeholder-related costs.
Reduce legal complexities.
Eliminate future lease extension expenses.
Improve long-term asset value.
Create greater transparency around expenditure.
Give owners more influence over financial decisions.
However, savings are not guaranteed.
Poor budgeting, inadequate reserve funds or ineffective building management can create significant costs regardless of the ownership structure. The real financial benefit comes from having a clear long-term plan for the building and ensuring funds are managed effectively.
Is Commonhold Right for Every Building?
Not necessarily. Every development is different. Factors to consider include:
The size of the building.
The number of participating owners.
Mixed-use elements.
Commercial units.
Existing management arrangements.
Building safety obligations.
Resident engagement levels.
Financial reserves.
For some blocks, remaining leasehold while improving governance and management may be the most practical solution. For others, converting to commonhold could provide greater long-term control and flexibility. The key is understanding the implications before making the decision.
How B2B Property Management Can Help
At B2B Property Management, we believe that successful buildings are built on transparency, communication and long-term planning—regardless of whether they are leasehold or commonhold. We support:
Resident Management Companies (RMCs)
Right to Manage Companies (RTMs)
Freeholders
Leaseholder-owned developments
Emerging Commonhold Associations
Our team can help you:
Assess Whether Commonhold Is Suitable - We work with directors and residents to understand the practical, financial and operational implications of moving towards commonhold ownership.
Improve Transparency - Clear budgets, transparent reporting and open communication help residents understand how their money is being spent and why decisions are being made.
Create Long-Term Financial Plans - One of the biggest challenges facing residential blocks is underfunded maintenance programmes. We help buildings establish realistic reserve fund strategies and long-term maintenance planning.
Manage the Building Professionally - Whether your building remains leasehold or converts to commonhold, professional management remains critical to protecting property values, maintaining compliance and delivering positive resident experiences.
The Future of Flat Ownership
The Government's reforms may represent one of the biggest changes to residential property ownership in generations. Commonhold is likely to play a much larger role in the future housing market than it has since its introduction in 2002. But ownership structure alone will not determine whether a building succeeds. Good governance, financial discipline, effective communication and professional management will remain the foundations of a well-run development.
Speak to B2B Property Management if your Resident Management Company, RTM Company or leaseholder group is considering whether commonhold could be right for your building, we would be delighted to help. Our team can provide independent guidance, practical management expertise and transparent support to help you understand your options and plan for the future.
Contact B2B Property Management today to discuss your building, your objectives and whether commonhold could offer a better long-term solution for your residents.
Request a free consultation and discover how proactive, transparent property management can help your building thrive, whether under leasehold or commonhold ownership