Government launches new Commonhold Council

In January 2021, the UK Government announced that leaseholders would be given the ability to extend their Lease by 990 years on payment of a premium and be relieved of ground rent payments.

The move was described as the most significant reform to English property law for a generation. 

The conduit for this development was to be the simplification and reinvigoration of the commonhold system.

Support for a change to current leasehold practices is widespread, and a 2020 Law Commission report underlined this sentiment by stating that the leasehold system was not working for homeowners. 

Housing Secretary Robert Jenrick stated that: 

"The widespread introduction of commonhold builds on our work to provide more security for millions of existing leaseholders across England, putting an end to rip-off charges and creating a fairer system." 

What is commonhold ownership?

Commonhold is a form of freehold homeownership mainly for use in flats or other interdependent buildings and provides a structure to manage any shared parts of the building.

In what is a much-maligned status quo, many leaseholders are currently liable for high ground rents and other costs imposed by landlords and freeholders. 

Under a commonhold ownership system, however, there would be no third-party landlord. 

Whilst homeowners may choose to employ a managing agent to facilitate the day-to-day running of a building, they will still retain control over the associated charges and facilities.

Following the recent Queen's Speech, the Commonhold Council has now been established and is formed of representatives from leasehold groups and industry experts. 

The Council will be responsible for advising on matters such as ensuring commonholds can flourish in as many residential settings as possible, including larger sites and blocks. 

Furthermore, they will be responsible for ensuring widespread take-up of commonholds and identifying how best to prepare the property market for its implementation. 

It remains to be seen how effective the Council will be in supporting the implementation of the commonhold system. 

Millions of people currently suffering from the worst parts of the English leasehold system will be keeping a keen eye on their progress. 

The property sector as a whole will welcome a fairer system able to provide security to homeowners and bring an end to what the Housing Secretary describes as "rip-off charges".

Expert legal advice 

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