In this week's blog, we look back to March 2025, when the Government published the Commonhold White Paper, the first step towards fulfilling its manifesto promise to abolish leasehold. The Ministerial Foreword stated: “The government is determined to ensure that commonhold becomes the default tenure…commonhold is not merely an alternative to leasehold ownership, but a radical improvement on it.”
Fast forward to the present day, and the Leasehold and Commonhold Reform Bill is expected to put these proposals into draft legislation. With a substantial parliamentary majority and clear political will, it seems inevitable that new properties in England and Wales could soon be sold as commonhold rather than leasehold.
And yet, as Landlord Today recently highlighted, “to date, commonhold has not been well received among housebuilders.” Fewer than 25 commonhold developments exist nationally, and developers, investors and mortgage lenders continue to treat the model with caution. For smaller property developers, such as our client base, the hesitation is particularly acute, and we unpack that further below.
Commonhold has been on the statute books since 2004, but remains largely untested in practice. With fewer than two dozen examples across England and Wales, developers have limited precedent to draw on. For smaller firms without the financial cushion of an extensive portfolio, experimenting with an unproven tenure model introduces real risk, from valuation uncertainty to unpredictable sales trajectories. Many mortgage lenders remain cautious about commonhold which is a considerable element of the development process, refinancing to market is something that’s looked at closely at the viability stages. A lack of familiarity with the model, uncertainty about enforcement and recovery mechanisms, and limited resale data all mean fewer products are available. For developers reliant on end-buyer mortgages to underpin sales, this can restrict their exit routes and raise finance costs.
Commonhold requires the creation of a Commonhold Association (CA) to manage the building, with every flat owner becoming a member. It’s a democratic model, but also a complex one. The rules are governed by a Commonhold Community Statement (CCS), which defines maintenance, voting rights, and responsibilities. For smaller developers without in-house legal or management expertise, setting up and handing over such structures can feel daunting. In traditional leasehold developments, developers typically retain control of the freehold until completion, gradually transferring responsibility to a management company. Under commonhold, control transitions earlier and more comprehensively to the unit owners. As Landlord Today notes, one technical issue lies in “how control is handed over as a development is built out.” This creates both administrative and reputational risks if things go wrong during the transition.
Leasehold structures have historically provided developers with ongoing income through ground rents, freehold reversion sales or lease extensions. Commonhold eliminates those opportunities. For smaller developers, who often rely on such secondary revenues to bolster profitability, that’s a tangible loss of long-term upside. Many urban developments today we review blend residential, retail and office components. However, the current form of commonhold has been described as “unsuitable for large or complex mixed-use developments.” The legal structure struggles to accommodate shared facilities such as car parks or commercial service areas. For developers whose pipeline includes mixed-use regeneration projects, this can add layers of cost and delay.
Despite these challenges, commonhold is coming, and it will eventually reshape how the UK builds and owns its homes. The key question is how developers, especially smaller ones, can adapt and prosper within that framework. At Invest & Fund, we specialise in complex development transactions, i.e. projects that demand tailored structuring, patient capital and an understanding of regulatory change. While the Commonhold White Paper sets out an ambitious vision, one designed to rebalance power towards homeowners (which we are 100% behind), the practicalities of delivery remain complex. The government’s dual ambition of reforming tenure and accelerating housing delivery will only be met if developers, funders and policymakers collaborate closely.
For smaller developers, the message is clear: change is coming, but support is available. By working with a finance partner that understands regulatory risk, governance complexity and market evolution, you can focus on building, confident that your funding structure is fit for the future. At Invest & Fund, we believe that complexity should not be a barrier to growth. Whether your next project is a high-density city development, a mixed-use regeneration scheme, or an early adopter of commonhold, our platform can help you secure the right capital, structure and support to deliver it successfully.
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