Government Publishes Commonhold White Paper

The Government has today, Monday 3rd March, published its Commonhold White Paper, outlining plans to transform property ownership in England and Wales. The proposals aim to make commonhold the default tenure for homes, marking a significant step towards phasing out the leasehold system. Under these reforms, the creation of new leasehold flats will be banned, offering homeowners greater control over their properties and eliminating ground rent payments.

Key changes set out in the Commonhold White Paper include:

• Ban on new leasehold flats: The Government has committed to banning new leasehold flats, reinforcing the shift towards commonhold as the preferred model of property ownership.
• Reinvigorating commonhold: The White Paper outlines plans to reinvigorate commonhold, making it the default tenure for new homes, providing homeowners full ownership and control over their properties without third-party landlords.
• New legal framework: A new legal framework will be introduced to make commonhold applicable across various types of developments, including mixed-use buildings and shared ownership homes.
• Enhanced financial safeguards: The proposals include stronger financial protections, such as mandatory public liability insurance, reserve funds, and increased oversight by commonhold unit owners to ensure long-term stability.
• Improved management standards: The White Paper introduces new rules for appointing directors, maintaining properties, and ensuring transparency in service charge apportionment, which will promote better management practices and empower homeowners.
• Democratic control for homeowners: Homeowners will have more control over how their building is managed, including voting on budgets, local rules, and management decisions.

A new Code of Practice will establish guidelines for how costs should be apportioned in commonhold, aimed at providing transparency and clarity for consumers. The Government is also committed to strengthening the regulation of managing agents to ensure fairer and more accountable property management practices.

Additionally, the Government will launch a consultation later this year to explore the best approach to banning new leasehold flats and advancing commonhold reform.

An ambitious draft Leasehold and Commonhold Reform Bill will be published later this year, setting out the legal framework for how reformed commonhold will operate.

You can read the full Commonhold White Paper HERE

TPI reacts:

Andrew Bulmer, CEO of The Property Institute (TPI), commenting on the publication of the Government's Commonhold White Paper, said:

“The Commonhold White Paper marks a major reform, making commonhold the default for new flats. While it ends leasehold for new builds, existing leaseholders must opt in to convert—some may not. With both tenures coexisting, we must ensure commonhold functions effectively while improving leasehold to avoid a two-tier system, a key concern raised by TPI and leaseholders themselves.

We welcome the Minister’s commitment to robust building maintenance measures in commonhold. Our Scottish members, who transitioned away from leasehold without such protections, know the challenges firsthand.

Commonhold is no silver bullet. It won’t significantly reduce service charges—a common misconception. By law, managing agents cannot profit from service charges, which fund essential maintenance. Rising insurance, energy, and staffing costs are the driving forces behind recent increases. TPI’s Service Charge Index shows little difference between landlord and leaseholder-controlled costs, with the latter actually fractionally higher.

A successful transition to commonhold requires upskilling for conveyancers, lenders, and valuers, while building managers must adapt to new legal frameworks. Importantly, building managers must be qualified and regulated to protect homeowners from unqualified operators. Commonholders must have confidence in competent, accountable professionals.

We look forward to working with Government to ensure a fair and effective system for all.”