Commonhold set to replace leasehold properties for new build flats

The government has published a white paper detailing changes to leasehold properties, making Commonhold the default tenure for new build flats. New rules will enable commonhold to work for all types of developments, including mixed-use buildings, and allow shared ownership homes within a commonhold.

RICS says there will be greater flexibility over development rights, helping developers build with confidence while maintaining safeguards for the consumer. Mortgage lenders will be given greater assurance with new measures to protect their stake in buildings and safeguard the solvency of commonholds, such as mandatory public liability insurance, reserve funds, and greater oversight by commonhold unit owners to keep costs affordable.

The management of commonholds will be strengthened with new rules around appointing directors, clear standards for repairs, and mandating the use of reserve funds. Additionally, there will be clarification on how owners may change “local rules” regarding how a building is run and new protections for when things go wrong. A new Code of Practice will set out how costs should be apportioned in commonhold, aimed at providing consumers with transparency and clarity.

The government is also committed to strengthening the regulation of managing agents. Furthermore, the government will launch a consultation later in 2025 to ban new leasehold flats and to explore the best way forward.

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