After many years of going back and forth, the UK Government has finally confirmed its next steps in a major reform of property ownership, with plans to phase out the traditional leasehold system for flats across England and Wales. The aim is to make commonhold the standard form of ownership for flats in the future.
The first stage of reform began with the Leasehold and Freehold Act, which received Royal Assent in May 2024. This Act immediately ended the creation of leasehold houses, meaning all new houses must now be sold as freehold. Additional measures included in the legislation, such as changes to make it easier for existing leaseholders to manage their buildings, will come into force on 3 March 2025. You can refer to our previous article on this mater too by clicking here.
Currently, over 70% of leasehold properties in England are flats, equating to around 4.8 million homes, which represent approximately 19% of all housing in England. In Wales, 16% of properties are leasehold, accounting for around 12% of property transactions, according to Land Registry data.
Important Changes from March 2025
Commonhold allows flat owners to jointly own and manage their building, creating a more transparent and cooperative system. This approach removes ground rent charges and puts owners in direct control of maintenance and costs.
Each flat owner automatically becomes part of a commonhold association, which oversees the management and governance of the building. The association can either manage the property directly or hire a managing agent – but unlike under leasehold, the agent would be accountable to the flat owners, not to a landlord.
The Law Commission’s 2020 report titled Reinvigorating Commonhold recommended this shift, highlighting how flaws in the original legal framework introduced in 2002 prevented commonhold from gaining traction in England and Wales.
What This Means for Property Professionals
Estate agents, conveyancers, and legal professionals will need to familiarise themselves with the commonhold system, including its legal structures, governance processes, and implications for buying and selling flats. This knowledge will be essential to guide clients through the new ownership process.
Property managers and managing agents will also see changes to their roles, as collective self-management by flat owners becomes the norm, potentially reducing demand for external management companies.
Why Reform Matters
Leasehold reform has long been a priority due to the widespread challenges leaseholders face when buying, selling, or managing their homes. Resolving these issues not only improves fairness for homeowners but also helps to create a more efficient and transparent property market.
Legacy Block Management, experts in property and estate management, fully supports these reforms and is actively preparing for the transition to commonhold, ensuring they can continue to advise and support property owners through the changing landscape.
