What will Commonhold mean for private landlords?

In January 2026, the government published its draft Commonhold and Leasehold Reform Bill.

It proposes widespread reform of the lease leasehold system in England and Wales, encouraging the wider adoption of Commonhold property ownership through collective associations. It also proposes a cap on ground rents of £250 a year, dropping to a peppercorn after 40 years.

Property developers and investors need to understand how the Bill will impact their business models before it is enacted.

What is Commonhold?

First introduced more than two decades ago, Commonhold is not new, yet its uptake has barely registered. As of 2023, there were just 184 properties registered as Commonhold compared to just under five million registered as leasehold.

However, renewed government backing signals a real shift in how flats and multi-occupancy buildings are owned, and landlords now need to need to prepare.

Commonhold is effectively a form of freehold ownership specifically designed for multi-unit developments, such as apartment blocks. Under this structure, each property owner owns outright the freehold of their flat (a ‘commonhold unit’). They also automatically become a member of a Commonhold Association, which owns and manages the shared areas of the building, for example, hallways, roofs and gardens.

Unlike leasehold, Commonhold ownership has no time limit and eliminates ground rents, the need for lease renewals or the need for collective enfranchisement to purchase a share of the freehold. It is designed to give homeowners more control and transparency over their building and associated costs.

It is not, however, without its challenges.

Whilst collective management gives homeowners greater control in decision-making, it doesn’t mean all residents will want to get involved. If owners cannot agree to spend money on necessary maintenance, it may result in greater disrepair and fractious neighbour relationships.

What will Commonhold mean for landlords?

For private landlords, especially those who own flats on a leasehold basis, the expansion of Commonhold could signal a gradual but significant shift in the market.

Those landlords with Commonhold units in an apartment block face having less control over decisions on maintenance, insurance and major works, with these decisions being made collectively by the Commonhold Association.

Likewise, if decisions on maintenance cannot be reached, landlords face holding property in buildings in disrepair that could affect future rents.

Worryingly, a Commonhold Association can, with a majority vote, change the rules for all units in a building. A landlord of short-term or Airbnb-style lets could quickly face restrictions. That same association can, with an 80% vote, choose to end the Commonhold status, which will be of concern to mortgage lenders.

Whilst the adoption of Commonhold is likely to remain slow for the foreseeable future, landlords need to be fully aware of the risks and opportunities it presents, and once again be prepared to pivot.

Ground rents

The Bill proposes a cap on ground rents of £250 from 2028, falling to a peppercorn 40 years after the Act receives royal ascent.

Its proposal remains contentious, with landlords saying that it interferes with existing property rights and contractual arrangements – and several law firms expect to see the legislation challenged through the courts.

It will have an impact on landlords and investors with significant ground rent portfolios. They should, if not already done so, review the impact of this legislation on their business and plan ahead.

If you would like to understand how these reforms may affect your property investments, contact our team for advice on planning ahead.