Monday 23rd February 2026
The publication of the draft Commonhold and Leasehold Reform Bill last month has been framed as the moment England and Wales began to move beyond leasehold.
Its sweeping programme includes banning new leasehold flats once a viable commonhold framework is established; capping existing ground rents at £250, then cutting them to a peppercorn after 40 years; and abolishing forfeiture in favour of a fairer enforcement regime.
Ministers say it is one of the most significant overhauls of property law in decades, with big implications for homeowners, developers and lenders. Crucially, they say, it marks the start of the end for the ‘feudal’ leasehold system.
But as the industry prepares responses to the consultation on the bill, a key question remains: who will run commonhold buildings? Commonhold hands control to residents via commonhold associations, making them responsible for a building’s governance, finances and stewardship. The bill strengthens this by introducing a commonhold community statement (a statutory ‘rulebook’), mandatory reserve funds and ways to organise mixed-use schemes in ‘sections’ where only those affected by a service or change vote on it.
In theory, this is welcome empowerment. In practice, it is a profound operational shift. But there are useful lessons from the residents’ management company (RMC) model. RMCs work well when residents have clear governance structures and a shared understanding of their financial and management responsibilities, supported by a reliable professional team, underlining the importance of embedding similar safeguards in the commonhold framework.
With all its flaws, leasehold provided a clear structure, with freeholders legally responsible for the building, aided by a managing agent. Commonhold replaces that central point of accountability with volunteer homeowners’ committees.
Managing a residential block is complex work. Overseeing fire safety compliance, planning major works, setting budgets, commissioning contractors, navigating disputes and balancing residents’ and commercial occupiers’ competing interests isn’t easy. Many of leasehold’s problems, such as spiralling service charges and poor communication, reflect how challenging it is to run buildings well.
The bill promises greater transparency for residents and accountability for managing agents, but transparency does not create expertise, nor does it guarantee good decision-making by residents themselves. The sector also has yet to reckon with the sheer variety of buildings that will be expected to adopt commonhold. A small, cohesive block of six flats presents a very different governance challenge from a 300-unit, mixed-tenure block with retail, shared energy systems and complex compliance needs.
No easy transition
Even with reforms proposing to reduce the threshold for converting from leasehold to commonhold, in some cases to 50% of qualifying leaseholders, rather than requiring consensus, transition will not be straightforward. The draft bill acknowledges the phased and uncertain nature of implementation, with key timings, exemptions and transitional arrangements yet to be finalised.
This makes a fragmented landscape likely; some buildings could move swiftly to commonhold while others remain in leasehold for years, with many caught in between. A two-tier market could emerge, where forward-thinking schemes adopt the regime early and more complex buildings stall due to ownership patterns or lack of readiness.
Critics also warn that eroding freeholder responsibilities may undermine investment in building safety and long-term maintenance, especially where resident-led associations lack the resources or expertise to manage and prioritise them. Mandatory reserve funds are important, but they will not safeguard against underfunding or poor planning.
If commonhold is to succeed on the scale envisioned, then capability, not just policy, must come to the forefront. That means investing in training, professional support and governance frameworks; equipping residents to take on big responsibilities confidently; and ensuring managing agents can adapt to a more collaborative, resident-directed role. It means lenders, developers and local councils must understand the operational, not just the legal, implications.
The bill may set the framework, but the devil is in the detail. The real test will be what happens when the governance of thousands of buildings becomes the responsibility of the people who call them home.
Claire Kober
Managing Director (Homes), Pinnacle Group
This article was originally featured in Property Week, on 18th February 2026.