Big Changes Ahead: What Leasehold Reform Means for Flat Owners and Buyers
At Loveitts, we've always believed that owning a home should be straightforward, fair, and empowering. That's why we're welcoming the government's bold new plans to overhaul the outdated leasehold system and usher in a new era of property ownership through commonhold.
Whether you're a current flat owner, a prospective buyer, or a landlord, these reforms will significantly reshape the property landscape in Coventry, Warwickshire, and beyond. Here's everything you need to know about what's changing, why it matters, and how it could affect you.
The Leasehold System: What's the Issue?
Leasehold ownership has long been a standard model for flats across England and Wales, but it's not without its problems. Under this system, homeowners own their property for a fixed period (the lease), while a separate freeholder owns the land the building sits on. This often leaves leaseholders with limited control over their homes and vulnerable to spiralling ground rents, restrictive clauses, and costly service charges - all dictated by third-party landlords.
These issues have sometimes led to legal disputes, unexpected bills, and even difficulties selling properties. Understandably, many leaseholders feel like tenants rather than actual homeowners.
The End of Leasehold for New Flats
That's why the government has now committed to abolishing the leasehold system for new flats entirely. Once the reforms are implemented, no new flats will be sold as leasehold - a monumental shift that's been called the "beginning of the end"for this feudal-style tenure.
Instead, commonhold will become the new standard.
What Is Commonhold?
Commonhold is a form of property ownership that allows homeowners to own their individual flat outright while jointly owning and managing the shared areas of their buildings (like hallways, roofs, and gardens) with other residents.
It's widely used in countries like Australia and the U.S., but it's struggled to gain traction in England and Wales, largely due to a lack of legal infrastructure and incentives.
That's now set to change.
Key Benefits of the New Commonhold System
The proposed Commonhold White Paper lays out a modern, simplified system with real benefits for homeowners:
Greater Control for Residents
Commonholders will have a direct say in building budgets, service charges, maintenance decisions, and the appointment of managing agents. This removes the imbalance of power that leaseholders often experience under the current system.
No More Lease Extensions
With commonhold, you own your home forever — not just for 99 or 125 years. That means no costly lease extensions or worrying about diminishing lease terms affecting your property's value.
Easier Dispute Resolution
Commonhold properties will be regulated by codes of good practice that are easier to update than primary legislation. That means more flexibility, better standards, and more transparent processes when disagreements arise.
Built-In Protections
Mandatory reserve funds, public liability insurance, and strengthened governance rules will be required, giving residents peace of mind and financial protection.
Encouraging Building Improvements
Many existing leases restrict specific improvements to prevent landlords from profiting. Commonhold removes that barrier, making upgrading or retrofit buildings to meet modern standards easier - particularly important as we move toward greener housing.
Making the Switch: What About Existing Leaseholders?
For current leaseholders, the reforms will make it significantly easier to transition to commonhold. A new legal framework will simplify the conversion process, enabling more flat owners to take control of their properties and break free from restrictive lease agreements.
In addition, lease extensions and freehold purchases will become cheaper and more accessible, and it will be easier to challenge unfair service charges.
What Happens Next?
The government is expected to publish a draft Leasehold and Commonhold Reform Bill later this year. This will lay out the detailed legislation needed to bring the changes into force.
Housing and Planning Minister Matthew Pennycook has made the government's position clear:
"By taking decisive steps to reinvigorate commonhold and make it the default tenure, we will ensure that it is homeowners, not third-party landlords, who will own the buildings they live in... These reforms mark the beginning of the end for a system that has seen millions of homeowners subject to unfair practices."
What It Means for You — And How Loveitts Can Help
These reforms represent one of the most significant shake-ups in property law in decades. While they promise a fairer future for flat owners, the transition will come with questions, legal steps, and practical considerations.
At Loveitts, we're here to guide you through it all. Whether you're considering buying a flat, selling a leasehold property, or converting to commonhold, our experienced team can help you confidently navigate the new landscape.
We'll be watching closely as the reform bill progresses and will keep you updated every step of the way.
Need advice about your leasehold or planning to buy a flat soon?
Get in touch with your local Loveitts office today and speak to one of our property experts.
Let's move forward - together - toward a fairer, simpler, and more empowered future of homeownership.