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Home » Government push to reinvigorate commonhold

Conveyancing
Tenants in these apartments can extend their lease
Jun 7th, 2021

At BLB Solicitors, our goal is simple – to deliver you clear, practical legal advice and cost-effective solutions. We hope you enjoy exploring our Blog. If you can’t find what you’re looking for, please do contact us.

Government push to reinvigorate commonhold

Siobhan DunsdonResidential leasehold specialist Siobhan Dunsdon reveals more about the government’s new plans to promote commonhold as a viable alternative to leasehold.

Contact Siobhan on 01225 462871. Alternatively, you can email her or complete the Contact Form below.

Leasehold reform remains a battleground of competing interests. So, the government has launched a Commonhold Council of leading property industry experts to advise them on implementing a reformed commonhold regime. Housing Secretary Robert Jenrick said this formed part of the government’s attempts to usher in the most significant reforms to property law in England and Wales for 40 years.

Check out my earlier article: What is commonhold?

Commonhold and Leasehold Reform Act 2002

The Commonhold and Leasehold Reform Act 2002 introduced into English and Welsh law the first new type of property ownership in over 75 years. Commonhold was seen as the answer to the multiple problems created by long leases.

Commonhold meaning

A commonhold scheme is created from freehold property, either land or a building (new or existing). The commonhold comes into effect on the registration of the property as a commonhold at the Land Registry. The commonhold framework is relatively straightforward. The freehold property divides into:

  • units (flats); and
  • common areas.

This allows an individual (a ‘unit holder’) to own the freehold of their flat. The freehold ownership of the common areas vests in a ‘commonhold association’, a company limited by guarantee. Common areas include the actual structure of the building, corridors, stairs, entrance hall, and any garden or car park. Membership of the commonhold association is limited to the unit holders, all of whom are entitled to membership. Unit holders each contribute a proportion of the cost of insuring the building and managing, maintaining and repairing the common areas.

Surprisingly, despite the fanfare greeting its introduction almost 20 years ago, commonhold has struggled to gain any real traction. In fact, with fewer than 20 schemes and only around 150 commonhold units were ever registered.

Commonhold Council

The launch of the new Commonhold Council follows an announcement in the Queen’s Speech signalling the government’s intention to reform and modernise the housing system. Commonhold gives homeowners more freedom over decision-making than leasehold. And ultimately, they are in control of their building.

Charles Roe, director of mortgages at UK Finance, said that work to reinvigorate commonhold as an attractive alternative to leasehold ownership of property should focus on newbuild homes to address the concerns of mortgage lenders. He told a Westminster Legal Policy Forum that while there are several lenders prepared to lend on commonhold properties, “it’s not as common as leasehold and that’s a problem… As a country we know and understand leasehold – both its flaws and positives. It will need government intervention and widespread support to ensure commonhold replaces leasehold [successfully].”

Commonhold lawyers

To discuss a commonhold scheme or commonhold conveyancing, please contact our commonhold solicitors team on 01225 462871. Alternatively, you can email us or complete the Contact Form below.

Siobhan Dunsdon
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