Moving to commonhold – government consultation opens

The government has opened its consultation ‘Moving to commonhold: banning leasehold for new flats’, running from 27 January 2026 to 24 April 2026. The consultation sets out proposals to ban leasehold for all new flats so that the reformed commonhold model becomes the default tenure for multi‑unit residential developments. This would amount to one of the most significant changes to housing in a generation.

The consultation seeks views on scope, exemptions, timings, transitional arrangements, and the wider commonhold legal framework, and the proposed reforms could have implications across development, governance, management, and financial planning for developers, registered providers and local authorities.

Background context

This consultation forms part of the wider programme of leasehold reform arising from the Leasehold and Freehold Reform Act 2024, which aims to strengthen leaseholder rights, improve transparency of service charges, and reduce legal and administrative burdens. It follows earlier government commitments to phase out leasehold for flats and replace it with a more consumer‑friendly commonhold structure.

Commonhold provides freehold ownership of an individual unit without a lease term, and the building is collectively owned and managed by a commonhold association comprising all unit owners. This intends to remove many of the structural issues associated with leasehold, including diminishing lease terms, enfranchisement processes, and freeholder‑leaseholder disputes.

Previous articles on this topic are available to read here and here.

What the consultation covers

• Making commonhold the default tenure for all new-build flats.
• Introducing a statutory ban on granting new leasehold flats (subject to limited exemptions).
• Seeking feedback on proposed transitional arrangements for schemes already in planning or construction.
• Considering exemptions for complex mixed‑use developments.
• Proposals for the governance and operation of commonhold associations, including reserve funds, building insurance, repair obligations, dispute resolution and enforcement.

Why this matters for developers, registered providers and local authorities

Developers, registered providers and local authorities will need to consider how commonhold affects their roles in new-build schemes and existing regeneration pipelines.

• Commonhold may require different funding, structuring and viability modelling for new developments.
• Management responsibilities will shift to the commonhold association, reducing direct long‑term involvement but also removing leasehold compliance risks.
• Shared ownership delivery in a commonhold block may be affected and require new legal mechanisms to integrate affordable housing products.
• Viability and risk distribution in mixed‑tenure schemes will change, requiring early-stage evaluation.

Impact on shared ownership

While shared ownership leases are not being abolished, their interaction with commonhold creates legal and practical questions. Shared owners hold a lease interest, whereas commonhold owners hold freehold title. The consultation acknowledges the need for transitional and structural solutions to ensure shared ownership can continue to operate effectively within commonhold buildings.

Registered providers should assess how staircasing, rent calculations, management obligations, and funding models will sit within a commonhold framework.

How to respond to the consultation

• Responses can be submitted via the Citizen Space online portal which can be accessed here.
• Alternatively, responses may be emailed to: commonhold@communities.gov.uk.
• Respondents should confirm whether their response is on behalf of an organisation or an individual.
• The closing date for submissions is 24 April 2026.

Recommendations

It is highly recommended that developers, registered providers and local authorities take part in this consultation to make their points of view heard. This is a major structural change that will affect future development pipelines, long‑term housing management models and delivery of affordable housing products.

In the meantime, these groups should:

• Evaluate the implications for governance, operational risk and financial planning.
• Assess how shared ownership and other affordable housing products will operate within commonhold blocks.
• Consider transitional impacts on schemes already in procurement or construction.
• Prepare and submit a detailed organisational response to influence the final design of the legislation.

Summary

This consultation provides a crucial opportunity for developers, registered providers, local authorities and anyone with a vested interest in housing to influence the design of one of the most significant housing reforms in decades.

With major implications for development pipelines, long‑term management structures and the operation of affordable housing products, your insight and practical experience will be essential to shaping a system that works in practice. By setting out your priorities and concerns now, you can help ensure the final framework reflects the realities faced by the sector and your organisation.

The Penningtons Manches Cooper housing team is available to support you in drafting consultation responses, preparing board briefings, or assessing the potential impact of these changes on your portfolio and future pipeline.