Commonhold could come the smarter alternative to buying leasehold. The Law Commission has opened a consultation on how to reform the leasehold system by making commonhold easier for homeowners to achieve.
Introduced in 2002, commonhold allows a homeowner to own the freehold on their flat alongside the rest of the owners in the block. Each becomes a member of a limited company that owns and manages the common areas of the building.
However, only a tiny proportion of properties have become commonhold since its introduction.
Extending franchise to benefit homeowners
And during its examination of how to reform the leasehold system in England and Wales, the Law Commission believes extending commonhold can benefit more homeowners.
There are around 4.2 million leasehold properties in England alone, many of them flats or apartments. The owner does not own their property outright but instead leases the land on which it stands from the freeholder for a specific period of time.
Most leases run for hundreds of years, but extending a lease can be expensive and time-consuming. And the risk is that the freeholder can take ownership of the property when the lease does run out, making the property worthless to its owner.
Culture change required
Professor Nick Hopkins is the Law Commission’s commissioner leading the review of leasehold.
He said: “Commonhold provides a once-in-a-generation opportunity to rethink how we own property in England and Wales and offers homeowners an alternative system to leasehold.
“I tinvolves a culture change, moving away from an ‘us and them’ mindset towards ‘us and ourselves’.
“We want to hear what people think of our proposals, so we can be sure the commonhold system will work for homeowners and the wider property sector.”
The consultation is open until March 10, 2019 and interested parties are invited to make their views known.