Commonhold Developments: First-Hand Insight on the Future of Property Ownership
Further to our piece on legislation updates for the property management industry, an additional White Paper for Commonhold Developments, was released in March 2025. It has confirmed the government’s intention to make commonhold the default tenure for new flats, as part of its broader Leasehold and Commonhold Reform Bill.
Although commonhold has been part of UK law since 2002, it still remains a largely unfamiliar concept to many. Now, with the government reform on the horizon, it’s more important than ever to understand how commonhold works and what it could mean in practical terms for homeowners, developers, and property managers alike.
To offer a grounded view, we spoke with Marco, one of our Finance Mobilisation Systems Managers here at POD Management, who brings both professional expertise and personal experience to the table. As a homeowner living in a commonhold development in Portugal, Marco provides real, first-hand insight into a system that may soon become mainstream in the UK.
What is Commonhold?
Commonhold is a form of freehold ownership designed specifically for flats and apartments. Unlike leasehold, where you own the property for a fixed term and a third-party controls the land and building, commonhold allows you to:
Own your unit outright, indefinitely.
Share ownership and responsibility for common areas through a Commonhold Association made up of all unit owners.
Participate equally in decisions affecting the development.
Operate under a standard set of rules known as the Commonhold Community Statement.
In essence, commonhold removes the landowner from the equation and puts control directly into the hands of the people who live there.
Why Hasn’t Commonhold Gained Traction?
Despite its promise, commonhold has never taken off in the UK. Fewer than 20 developments have been created since the model was introduced. There are a few reasons why:
Developers Prefer Leasehold: Leasehold allows them to retain control of the freehold, collect ground rents, and sell freehold rights later.
Mortgage Lenders Were Hesitant: Initially, many lenders were unfamiliar with the model and cautious to lend on commonhold properties.
Lack of Awareness: Buyers, lawyers, and even estate agents often aren't as familiar with commonhold developments.
No Incentive to Convert: Transitioning from leasehold to commonhold is legally possible, but it can be complicated, expensive, and requires 100% agreement from leaseholders.
Fragmented Property Laws: The legal and administrative framework wasn't fully fleshed out, especially for multi-phase developments or mixed-use sites.
What’s Changing Now?
The 2025 White Paper outlines several measures designed to encourage widespread adoption of commonhold:
Making commonhold the default tenure for all new flats.
Simplifying conversion from leasehold to commonhold.
Improving governance structures, including clearer dispute resolution procedures.
Better support for mortgage lenders to finance commonhold purchases confidently.
Launching education and awareness campaigns aimed at buyers, lawyers, and developers.
The Law Commission (2020) has already done extensive work on reform proposals, and the government has signalled an intention to implement many of these recommendations.
Why This Matters for the Industry
A transition to commonhold will mean real change across the property sector. While commonhold offers benefits, such as eliminating ground rents and reducing leaseholder disputes, it also necessitates robust governance and effective collaboration among property owners.
Developers: May need to adapt sales and design models to suit this new tenure, especially where there is a long build phase.
Solicitors and Conveyancers: Must understand the intricacies of commonhold to properly advise clients.
Managing Agents: Will shift from managing on behalf of freeholders to managing on behalf of the owners themselves.
Buyers: Stand to benefit from full property ownership with no ground rents or lease expiry concerns.
Property managers, in particular, will need to adapt to more collaborative, owner-led models of governance, working more with resident-run associations rather than investor landowners.
Marco’s First-Hand Commonhold Experience
Our Finance Mobilisation Systems Manager Marco lives in a six-flat apartment building in Portugal, where commonhold is the norm. His experience offers a positive glimpse into what the UK might expect - especially in smaller developments.
“It’s always been very straightforward.” Marco says. “We have good communication, and we all contribute to maintenance through a shared fund. There’s no landlord, so decisions are made jointly. Because ownership is shared among residents, there's a strong sense of community.”
“Each apartment owner contributes a fixed monthly amount that is deposited into a communal fund, which is used for maintenance and repairs - such as upgrades to shared areas. Where communal work is needed, the appointed administrator(s) will confer with all other residents, so we’re always in the know and can come to decisions together.”
Ownership, but with Responsibility
The biggest advantage, Marco says, is true ownership. “With leasehold, you never truly own the whole of your property, but with commonhold, I own a proportion of the building and land. It feels more permanent, more comfortable.”
This ownership comes with responsibility. There’s no external managing agent by default; the residents are the Commonhold Association. They appoint an administrator, but major decisions require consensus.
“You insure your own flat, contribute to the shared fund, and have a say in what happens. It really builds a sense of ownership, community and transparency.”
What Challenges Exist?
Of course, things can’t be perfect all of the time. Marco makes the valid point that larger buildings or those in lower-income areas may experience difficulties with coordination or funding. Regular communication is essential, and someone must be appointed as the administrator.
“From what I know, the biggest issues tend to be non-payment and disputes. If one or two people don’t contribute, you’re left chasing funds, which can cause friction at times.”
In buildings without a professional managing agent, responsibilities like maintenance, compliance, and dispute resolution fall on the shoulders of residents.
“People often start out wanting to manage the building themselves. But it’s a lot of work. That’s when they usually call in a reputable company, like POD, to assist.”
Management Company Onboarding
For property managers like POD, the practical difference between leasehold and commonhold structures aren’t likely to be too dramatic.
“From what I’ve seen in Portugal, commonhold developments will likely follow a structure similar to an RMC (Residents’ Management Company). We’d be brought in by the Commonhold Association or group of owners to help run the building.” Marco states.
“Whether leasehold or commonhold, the role of a property manager is to make life easier and more comfortable for residents and ensure buildings are well-maintained. The key difference will be who we report to - landlords or the owners themselves.”
A Fairer Future?
Commonhold doesn’t eliminate service charges or responsibilities - it simply changes who controls them. Charges are still paid, but the structure potentially offers greater fairness, autonomy, and transparency.
“It’s just a different way of ownership - and it’s one that gives you more control. You pay into a financial pot, just like you essentially do in leasehold, but the money stays within your residential community. For long-term homeowners or families hoping to pass property down through generations, commonhold could offer a simpler, more secure path.”
*The above information is based on Marco’s individual experience in Portugal and with official legislation yet to be confirmed in the UK, this is purely a helpful insight into working Commonhold to bring a more practical element to this popular discussion.
Want to Know More?
The pending move to commonhold represents a fundamental shift in how flats are owned and managed in England and Wales. While the legislative framework is still evolving, the direction of travel is clear: a move away from outdated leasehold systems towards something fairer, transparent and more resident-driven.
Marco’s experience demonstrates that, with collaboration and clear communication, commonhold developments can offer greater empowerment for residents, more transparency, fewer disputes, and better long-term outcomes.
At POD Management, our UK property management company is committed to navigating this new landscape with professionalism and expertise. By staying informed and adapting to new regulations, we continue to provide exceptional service to our clients while contributing to the evolution of the property management industry.
If you are looking to appoint a new property managing agent to assist in the smooth running of your development as these changes come to fruition, the POD team can help you today:
Fill out our business enquiry form
Email us at relationships@podmanagement.co.uk
Call us on 0333 577 6656