The government’s upcoming Leasehold and Commonhold Reform Bill aims to make commonhold the default tenure for new flats, signalling a major shift in property law. However, concerns remain about commonhold’s practical challenges and market acceptance. An alternative model developed by Weston Homes and Nockolds offers a balanced approach that preserves leasehold’s legal certainty while granting residents genuine control, a development landlords should consider carefully.

Why Leasehold Reform Matters to Landlords

Leasehold reform is a critical issue for landlords managing flats, as it affects ownership structures, service charge arrangements, and long-term management responsibilities. The government’s push to replace leasehold with commonhold intends to empower flat owners but raises questions about mortgage lending, building maintenance, and collective management. Understanding the implications of both commonhold and alternative models is essential for landlords to navigate future regulatory changes and maintain stable property portfolios.

The Government’s Commonhold Proposal and Its Challenges

The Leasehold and Commonhold Reform Bill is expected to establish commonhold as the default tenure for new flats, replacing leasehold arrangements. Commonhold offers flat owners freehold-style ownership and democratic control through a commonhold association. While this addresses some leasehold issues, such as unfair ground rents and landlord profiteering, it introduces new complexities.

Mortgage lenders currently show reluctance to finance commonhold properties due to concerns over collective management risks, including enforcement difficulties when some owners fail to pay service charges or maintain the building. This hesitancy could deter developers from building flats that buyers cannot easily finance, potentially slowing housing delivery at a time when high-density developments are crucial to meeting government targets.

The Practical Burden of Commonhold Management

Commonhold requires flat owners to collectively manage their building, often through volunteer directors responsible for budgets, repairs, and compliance with legal and safety regulations. This can place a significant burden on residents, with the risk that a minority undertakes most management tasks or that essential maintenance is neglected. Although proposals allow professional managing agents to serve as directors, some may be reluctant to assume these responsibilities, especially regarding building safety.

For landlords and agents, this raises concerns about the sustainability of commonhold management and the potential impact on building upkeep and resident satisfaction. The lack of clear enforcement mechanisms and the difficulty in achieving majority agreement on service charges could affect building safety and financial stability.

Weston Homes’ Freehold Transfer Process: A Third Way

In response to these challenges, Weston Homes has implemented a ‘freehold transfer process’ since 2022, offering a hybrid solution that retains the familiar leasehold framework while giving residents meaningful control. Each development includes a Residents’ Management Company (RMC) established at the point of sale. After completion, Weston Homes transfers the freehold to the RMC at no cost, making every flat owner a member with the ability to appoint directors.

This model preserves 999-year leases, providing security and clarity, while eliminating external landlords, ground rents, and opaque third-party interests. Service charges are set transparently by the RMC, with any surplus held as reserves. The approach has been adopted in 15 schemes, with positive resident feedback highlighting relief at the absence of external landlords and satisfaction with fair service charges.

Implications for Landlords and Agents

For landlords, this model demonstrates that leasehold reform need not mean abandoning leasehold entirely. Strengthening leasehold through resident-owned freeholds and transparent service charges can address fairness and management concerns without destabilising the housing market. It also aligns with government intentions to improve regulation and qualification of managing agents, which could enhance leasehold administration.

Landlords should monitor these developments closely, as the balance between legal certainty and resident control will influence management practices, service charge collection, and dispute resolution. The Weston Homes model offers a practical template that may inform future reforms and industry standards.

The Need for a Measured Transition

Commonhold remains untested at scale, with fewer than 25 developments nationally, and technical issues persist around dispute resolution, constitutional amendments, and phased development handovers. Leasehold’s established legal framework and familiarity among developers, lenders, and agents make it a more stable option in the short term.

A cautious, phased approach to reform that includes pilots and strengthened leaseholder protections may better support housing delivery targets and market confidence. Rapid wholesale change risks slowing build rates, reducing flats in favour of houses, and undermining the fragile housing pipeline.

Expert Legal Perspective

Joanne Wood, Solicitor at Mullis & Peake LLP, notes that their firm has experience acting for RMCs acquiring freehold interests at the point of final unit sale, ensuring transparency and compliance with relevant legislation. Early involvement in drafting and standardised documentation helps minimise risks and smooth handovers, a process that benefits landlords by clarifying management responsibilities and service charge arrangements.

Lucy Riley, Legal Director at Nockolds and member of the Association of Leasehold Enfranchisement Practitioners, emphasises that leasehold reform should not be a binary choice between flawed leasehold and idealised commonhold. Instead, blended models that reflect real-world living and development finance realities can deliver consumer protections without jeopardising supply.

Looking Ahead: What Landlords Should Know

The government’s Commonhold White Paper and forthcoming legislation signal significant change, but landlords should be aware of the complexities and risks involved. Commonhold may play a role in the future, but only if it becomes workable and gains lender confidence.

In the meantime, the Weston Homes freehold transfer process offers a viable alternative that balances resident control with legal certainty. Landlords and agents should engage with these developments to prepare for evolving tenure structures and management expectations.

TLA Update

The Tenant and Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. Legal, trades, insurance, financial, mortgage, tenant screening, and other service providers are invited to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/