For decades, leasehold properties have been a major frustration for UK homeowners, particularly for those who have purchased flats or apartments. Rising ground rent, high service charges, and limited control over their own homes have left many feeling trapped.
Now, the UK government has announced a major change—leasehold flats will be banned under new proposals, and a commonhold system will take its place.
But what does this actually mean for first-time buyers? Should you wait for the reforms or buy now?
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What’s changing? The end of Leasehold flats
Under current rules, if you buy a leasehold flat, you own the property but not the building or the land it sits on. Instead, a third-party landlord (often a developer or investor) owns the freehold and they make decisions about building maintenance, service charges, and ground rent.
The new government proposals will:
Ban the sale of new leasehold flats, meaning all future flats will be sold as Commonhold instead.
End the control of third-party landlords, giving homeowners full ownership and management of their buildings.
Introduce strict regulations to reassure mortgage lenders that Commonhold buildings will be well-managed.
For first-time buyers, this is a huge shift that could change the way flats are bought and owned in the UK.
What is the Commonhold system?
Commonhold is an alternative property ownership model that already exists in many parts of the world, including the US and Australia. Flat owners will collectively own and manage their building, rather than having a freeholder in charge.Decisions on service charges and maintenance will be made by the residents, not an external landlord.
No more ground rent, which has been a major financial burden for leaseholders. Commonhold properties won’t lose value over time (unlike leaseholds, which become harder to sell as the lease term runs down).
Why is this important?
Many first-time buyers currently hesitate to buy a leasehold flat due to the risk of rising costs and limited control over their property. Commonhold eliminates these concerns and gives flat owners full ownership rights, just like freehold house owners.
How will this affect First-Time buyers?
If you’re a first-time buyer considering purchasing a flat, these changes will have a direct impact on your options. Here’s what you need to know:
1. Should you wait to buy a flat?
With leasehold flats set to be banned, you might be wondering if it’s better to wait for the new system to come into effect before buying a home.
If you buy now, you may still face leasehold fees and restrictions, depending on your developer.
If you wait, you might be able to buy a commonhold flat with full ownership rights.However, the timeline for these reforms is not yet confirmed, meaning waiting could take years, not months.
If you find a great property at an affordable price, don’t let this reform stop you from buying—it’s always possible to extend your lease or purchase the freehold later.
But if you’re considering new-build flats, waiting for the switch to Commonhold might be worth it.
2. Will these changes affect house prices?
Many experts believe the switch to Commonhold could increase the value of flats over time. Why? Because buyers will no longer have to worry about leasehold issues, making these properties more desirable.
Leasehold flats have historically been harder to sell compared to freehold houses.
With the end of leasehold, demand for flats may rise, potentially increasing prices.
If you already own a leasehold flat, you may see an increase in value once commonhold becomes the norm.
If you’re looking for long-term investment potential, Commonhold flats could be a safer bet than leasehold ones.
3. What if you already own a Leasehold flat?
If you’re an existing leaseholder, these reforms could help improve your situation in the future. However, they won’t automatically change your property into Commonhold.
You may still need to extend your lease or buy the freehold under current rules.
The government is considering ways to make it easier for leaseholders to convert to Commonhold.
If your building switches to Commonhold, you will need to participate in its management.
These changes are good news for leaseholders, but they may take time to fully roll out.
Hasn’t the government promised this before?
Yes, the previous Conservative government had pledged to abolish leasehold in the past, but many of the proposed reforms never came into effect.
2017 – Plans to ban leasehold houses were announced but only partially implemented.
2021 – The government promised to abolish leasehold entirely, but it didn’t happen.
2022 – The Leasehold Reform (Ground Rent) Act stopped ground rent on most new leases, but existing leaseholders were still affected.
Now, with the new Labour government in place, the Leasehold and Commonhold Reform Bill is set to finally bring lasting change.
However, this is still in the early stages. The draft Bill will be published later this year, and it will then need to go through Parliament before becoming law.
How long will this take? There’s no fixed timeline, but it could take several years for Commonhold to fully replace leasehold in the UK.
What should First-Time Buyers do now?
If you’re buying a house – This change won’t affect you, as houses are usually freehold.
If you’re buying a flat – Be aware that new leasehold flats will be banned, so waiting for Commonhold could be beneficial.
If you already own a leasehold flat – Keep an eye on further reforms, as they could make it easier for you to convert to Commonhold.
If you’re considering buying your first home and want expert advice on whether to buy now or wait, we’re here to help!
Book a free consultation today to discuss your options: Your first home might be within reach—let’s help you make it happen!
Disclaimer:
This information is for general guidance only and does not constitute professional advice. The content is based on the author's research and opinions at the time of writing. Please consult with a qualified professionals before making any investment, financial, or business decisions.
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