UK government aims to replace leasehold with commonhold, but challenges remain

For many leaseholders in England and Wales, the dream of a peaceful retirement home has turned into a source of significant stress. Sally, 74, who bought her flat in 2021, is one of over 1,000 people who have spoken out about the pressures of leasehold ownership. Fast-rising service charges and ground rent costs leave leaseholders feeling a lack of control over their own homes.

Sally experienced this firsthand when her annual service charges for her London flat more than doubled from approximately £2,600 to over £5,400 in one year. This increase caused immense stress and anxiety among her and fellow owners, leading to discussions about how they would manage the payments.

In response to these pressures, the UK government is introducing the Commonhold and Leasehold Reform Bill. This legislation aims to ban new leasehold flats and replace them with commonhold, a system where residents collectively own and manage their buildings. Housing Minister Matthew Pennycook stated that those who live in flats should own and control their buildings, not third-party landlords.

Despite the government's push for reform, freeholders argue that most leaseholders are satisfied with their ownership. However, the government is proceeding with reforms seen as the biggest shake-up of home ownership in decades. The transition to commonhold raises questions about its potential to create new challenges for homeowners and whether the deeply entrenched leasehold system, which has existed for centuries, can be effectively replaced or if new problems will emerge.

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The people who should own buildings, and who should exercise control over their management, shared facilities and related costs are not third-party landlords but the people who live in flats within them and who have a direct stake in their upkeep.