If a renegade came in, we might struggle.
For nearly a thousand years, England's land tenure system has placed millions of flat-dwellers in a subordinate relationship to freeholders — paying for the ground beneath their own homes, subject to charges they cannot easily contest. Now, a government reform bill seeks to replace this feudal inheritance with commonhold, a collective ownership model already common across the developed world. The ambition is clear, but the path runs through contested compensation claims, reluctant lenders, and the quiet difficulty of persuading millions of institutions and individuals to reimagine what it means to own a home.
- Five million leaseholders face unpredictable service charges and ground rents that can double without warning, leaving retirees and ordinary homeowners in genuine financial distress.
- The government's reform bill would ban new leasehold flats and introduce commonhold — but converting the vast existing stock requires compensating freeholders whose legal challenges have already reached the courts.
- Commonhold's own track record in England is thin and troubled: only eighteen such developments exist, and some have descended into governance disputes, debt, and deadlock that residents describe as a disaster.
- Mortgage lenders remain hesitant, and the entire professional ecosystem — valuers, surveyors, conveyancers — must be retrained before commonhold can function at scale.
- Political will is building across parties, but the Housing Minister himself has acknowledged that immediate abolition of leasehold is almost certainly impossible, framing this as a generational transition rather than a swift fix.
Sally, seventy-four, bought a London flat in 2021 expecting a peaceful retirement. Instead she found herself weeping over service charges that nearly doubled in a single year, powerless to challenge a freeholder she had never chosen. Her experience mirrors that of five million leaseholders across England and Wales — a population the BBC found to be largely anxious, largely powerless, and largely unaware of how deeply the system was stacked against them.
The leasehold model has roots stretching back to William the Conqueror. Flat owners hold a time-limited interest in their homes while a freeholder — often a distant investor — owns the land, appoints managing agents, and collects ground rents that can rise at fixed intervals. Critics, including the government's own Housing Minister, have called it feudal. The Commonhold and Leasehold Reform Bill now proposes to end it for new flats, replacing it with a system where residents collectively own and govern their buildings, vote on shared decisions, and hold no landlord above them.
The idea is not new — commonhold was introduced in law in 2004 — but it never took hold. Lenders were wary, professionals unfamiliar, and developers indifferent. Only eighteen commonhold developments exist in England today. Some, like the Somerset building where eighty-one-year-old John Bartholomew has lived for twelve years, function reasonably well. Others have collapsed into debt and legal paralysis when a single resident refused to pay their share — a problem that under leasehold a freeholder could resolve through repossession, but under commonhold requires a court.
Freeholders argue they provide stewardship and neutral arbitration, and point to evidence from Scotland suggesting collective ownership can leave buildings in disrepair. But the deeper obstacle is financial and legal: converting five million existing leaseholds means compensating freeholders, and those freeholders have already challenged reform legislation in court on human rights grounds. A barrister warned Parliament that further legal challenges are almost inevitable.
Scotland's abolition of its feudal land system offers little guidance — it affected only around twenty-five hundred long leases, a fraction of England's scale. The government has sought to manage expectations, with the Housing Minister acknowledging that outright immediate abolition is almost certainly impossible. What comes next depends on courts, lenders, professional training, and political continuity — a slow institutional reckoning with a system a thousand years in the making.
Sally is seventy-four years old. She bought a two-bedroom flat in London in 2021, hoping it would be a quiet place to retire. Instead, she found herself trapped in a system that made her weep with anxiety. When she first moved in, her annual service charges ran to about twenty-six hundred pounds. One year, they nearly doubled to fifty-four hundred. "That was a really bad year," she recalls. "Me and my fellow owners were very stressed and anxious. There were tears and I remember us talking about how we were going to pay."
Sally is one of five million leaseholders in England and Wales. When the BBC spoke to over a thousand of them, a pattern emerged: most felt powerless. Service charges climbed without warning. Ground rents—fees paid for the land beneath their buildings—could double at fixed intervals or rise with inflation, making properties harder to sell or refinance. The freeholder, often an investor with no stake in the building itself, appointed a managing agent, sent the bills, and collected the ground rent. It was a system critics, including the government's Housing Minister Matthew Pennycook, called feudal. It had roots stretching back nearly a thousand years, to William the Conqueror's distribution of English land to loyal nobles who leased it to others for fixed terms.
Now the government wants to dismantle it. Under the Commonhold and Leasehold Reform Bill, new leasehold flats will be banned. In their place comes commonhold—a system where residents collectively own and manage their buildings. There is no freeholder. Flat owners vote on decisions about shared spaces and maintenance. They pay into a reserve fund and either manage the property themselves or hire a managing agent. The idea is not new. Tony Blair's government introduced commonhold into law in 2004. But developers rarely chose it. According to the Land Registry, only eighteen commonhold developments exist in all of England. Lenders were reluctant to finance them. Valuers and surveyors didn't understand them. The system remained a curiosity.
Yet the logic is compelling. In Australia, the United States, and most other developed nations, some form of commonhold or condominium ownership already dominates. Dr. Cathy Sherry, a property law professor at Macquarie Law School in Australia, studied the question across the world. She describes leasehold as "deeply unfair." Australia's strata system—similar to commonhold—works because ownership and building management are set out in legislation, not in millions of different leases. "The reason why we have strata and condominiums," Sherry explains, "is ex-British colonies were settled by people, the working class of Scotland, England, Wales and Ireland, and they actively did not want the emergence of a landed aristocracy."
But commonhold is not without problems. John Bartholomew, eighty-one, has lived in one of England's eighteen commonhold developments in Somerset for about twelve years. He and his wife have found it workable—they hold annual general meetings, discuss shared spaces like the car park, agree on maintenance. Yet he acknowledges the fragility of the arrangement. "If a renegade came in, we might struggle," he says. The BBC found residents in other commonhold buildings less fortunate. One man, who declined to be named, described his development as a "nightmare." A flat owner refused to pay toward maintenance. The collective fell ten thousand pounds into debt. Under leasehold, a freeholder could repossess a home if charges went unpaid. Under commonhold, disputes go to court. The man felt trapped. "The government is pushing commonhold forward, but it's not the way to go. It's terrible—a disaster."
Freeholders argue they serve as stewards, maintaining buildings and acting as neutral arbiters in disputes. They point to research suggesting Scotland's commonhold-like system has created "major hurdles" in building maintenance, with twenty-eight percent of structures in critical disrepair. A lawyer told Parliament there was a risk of "stalemate situations" where residents might refuse to fund necessary work. She had seen resident-managed buildings that never paid into reserve funds, now facing five or six-figure repair bills. These are not trivial concerns. Yet they are also not unique to commonhold. Any system where multiple people share responsibility for a building carries such risks.
The hardest part of the government's plan is not banning new leasehold flats. It is converting the existing five million. That means transferring ownership from freeholders to residents. How much compensation freeholders deserve is fiercely disputed. The previous government tried to make buying a share of freehold cheaper, but freeholders challenged the law in court, claiming it breached their human rights. The government won, but the decision is under appeal. A barrister told Parliament it was "almost inevitable" that further legal challenges would come once new legislation passed. Scotland offers no useful precedent. It did not reform leasehold so much as abolish a much smaller version of it. In 2000, Scotland ended a feudal-style system of land ownership. Long leases were automatically converted to ownership in 2015. But the scale was tiny: in 2006, only about twenty-five hundred long leases remained in Scotland—roughly two percent of all residential properties. Compensation was modest, roughly forty times the annual rent for leases under a hundred pounds a year. English freeholders will demand far more.
The Housing Minister has sought to manage expectations. In April, he said the "outright and immediate abolition of the leasehold system in England and Wales" would be "almost certainly impossible." Yet political momentum is building. Former housing secretaries Angela Rayner and Michael Gove both backed reform. The Liberal Democrats and Greens support commonhold. The likely next prime minister, Andy Burnham, has previously expressed support for leasehold reform. But the draft bill is described as "technical and long." Lenders must be convinced to finance commonhold properties. Estate agents, valuers, surveyors, and conveyancers must be trained. A former director of mortgages at UK Finance told Parliament the transition would be "a big piece of work." Whether it happens depends now on politics as much as policy—on who becomes housing secretary, on how quickly courts move, on whether the institutions that finance homes can be persuaded to treat commonhold owners as equals rather than second-class citizens.
Notable Quotes
That was a really bad year. Me and my fellow owners were very stressed and anxious. There were tears and I remember us talking about how we were going to pay.— Sally, 74-year-old leaseholder
The outright and immediate abolition of the leasehold system in England and Wales would be almost certainly impossible.— Housing Minister Matthew Pennycook
The Hearth Conversation Another angle on the story
Why has leasehold persisted in England when most of the world moved away from it?
Inertia, mostly. The system has been around for a thousand years. Developers got comfortable with it. Lenders didn't understand commonhold, so they wouldn't finance it. Once a few buildings were built as leasehold, the whole industry organized around that model. It became the path of least resistance.
But if commonhold works in Australia and America, why wouldn't it work here?
Scale and politics. Australia converted maybe twenty-five hundred long leases in 2015. England has five million leaseholders. The compensation question alone could tie the courts up for years. Freeholders will fight hard because they own something valuable—the right to collect ground rent forever.
What happens to someone like Sally if commonhold becomes the default?
For new flats, she's protected. But for her existing flat, nothing changes unless her building votes to convert. And conversion means her freeholder has to agree to sell their interest, or the government has to force a sale and compensate them. That's where it gets stuck.
Is commonhold actually better, or just different?
It's better in theory. You own your building collectively instead of renting the land from an investor who lives somewhere else. But it requires people to cooperate, to pay into reserves, to show up to meetings. Some commonhold buildings work beautifully. Others fall apart because one person won't pay and everyone else has to cover the cost.
So the government is betting that culture will change?
Yes. They're betting that if you give people ownership, they'll act like stewards instead of renters. That's a big bet. It might work. Or it might create a new set of problems we haven't seen yet.
What's the timeline?
No one knows. The bill is still in draft. Legal challenges are coming. Lenders need to be convinced. Institutions need training. The Housing Minister said immediate abolition is "almost certainly impossible." So we're talking years, maybe a decade.