Commonhold’s real test is not the law -it’s whether people are ready to make it work

The future of commonhold depends on more than legal reform; the expectations and engagement of those living in owner-managed buildings will be central to making the model work in practice.

The government’s draft Commonhold and Leasehold Reform Bill, published in January 2026, is designed to reinvigorate commonhold and make it the default tenure for new flats. The Housing, Communities and Local Government Committee is currently scrutinising the details before legislation is introduced formally. Alongside that, the government is also consulting on banning new leasehold flats.

In policy terms, the direction of travel is clear. Commonhold is no longer a theoretical alternative. It is being positioned as part of the future of home ownership in England and Wales.

As the draft Commonhold and Leasehold Reform Bill moves to make commonhold the default for new flats, success will be measured by residents’ willingness to build the trust, accountability and collaboration essential to collective ownership. Commonhold may offer an alternative to leasehold, but it also brings greater responsibility, making clear communication, transparent governance, strong managing agent relationships and realistic expectations vital to the success of the new framework.

The biggest weakness in any shared ownership model is not always bad faith. Often it is a misunderstanding. People do not always know what they have bought, what they are responsible for, why they pay towards shared costs, or how decisions are made.

I recently spoke with Peter Scott, a director of a resident owned freehold company in Kensington – a similar model to the commonhold system being proposed by government. In his building, owner engagement is structured, with a board, owners’ committee, a long-term maintenance plan, and crucially a relationship with a professional managing agent that supports owner accountability. This model works well in Peter’s building due to its governance structure and active engagement from owners.

These on the ground insights are useful for informing how we are going to realistically implement commonhold in developments. The idea that resident control is conducive to harmony is simplistic. It’s important to remember that commonhold has existed since 2002, but uptake has been limited. The current reform programme is intended to address that by modernising the legal framework, improving lender confidence and making conversion easier in some circumstances.

The draft bill and its accompanying guide explain that commonhold was originally designed to solve a longstanding problem in English and Welsh property law: how to allow freehold style ownership of flats while still enforcing the positive obligations needed to manage shared structures and spaces.

However, for this to work, there must be real principles in place to help directors of commonhold associations. Firstly, education. Misunderstanding is one of the biggest weaknesses for any shared ownership model. Residents must be fully aware of what they bought, where their responsibilities lie, how their service charges are spent, and most importantly how decisions are made. Removing the ambiguity of traditional leases will only work if buyers can engage with it, and professionals are able to explain it properly.

There must also be proportionate support for directors. Volunteer governance can be daunting, especially when it involves compliance, budgeting and risk management. Access to training will be essential, but support for volunteer directors cannot be optional in practice.

Thirdly, there is a crucial difference between owner led and self-managed. For many buildings, professional management remains essential. A good managing agent can handle the operational machinery, but owners still need to stay engaged, ask questions, and make decisions.

We are not starting from a neutral place. There are millions of leasehold homes nationwide – the government’s own materials acknowledge the scale of that existing market. Therefore, managing the transition to commonhold for future development takes time.

The crucial takeaway is not whether leasehold or commonhold is a superior model, but rather whether buildings and their owners are set up to support the habits that make collective ownership succeed: clarity, accountability, participation, transparency and a willingness to balance individual preference with shared responsibility.

Outcomes can only be as good as the people that feed into it. If the draft commonhold model is meant to improve on the ambiguity of traditional leases through a more standardised commonhold community statement, it will only work if buyers engage with it and professionals explain it properly.

Mairead McErlean is head of compliance and regulatory affairs at FirstPort