The Government has vowed to finish the job of ending the ‘feudal’ leasehold system in England and Wales by making commonhold the default tenure.

Housing minister Matthew Pennycook said it will achieve this through both new commonhold developments and by making conversion to commonhold easier.

Unlike leasehold, commonhold allows owners to fully own their property outright.

Under the new Commonhold white paper, they would be involved in managing their building and won’t pay ground rent.

Commonhold Association

Each owner will become part of a commonhold association that oversees both the governance and management of the building, and has a say on the annual budget, including how charges for upkeep and maintenance are spent.

“These reforms mark the beginning of the end for a system that has seen millions of homeowners subject to unfair practices and unreasonable costs at the hands of their landlords and build on our Plan for Change commitments to drive up living standards and create a housing system fit for the 21st century,” explained Pennycook.

Once a new legal framework for commonhold is introduced, new leasehold flats will be banned.

The Government wants to speed up progress to make it cheaper and easier for leaseholders to buy their freehold or extend their lease, and for leaseholders to challenge unreasonable service charge increases. It plans to introduce further reforms in its Leasehold and Commonhold Reform Bill to be published later this year.

Scott Goldstein, partner at legal firm Payne Hicks Beach, said the concern is to make sure that the system is ready to cope, with robust financial controls in place so commonhold blocks have the resources they need to manage their properties.

“As commonhold blocks are always run by property owners, many more of us will be involved in property management,” he added. “The Government needs to provide easy to follow resources to educate and train all of us about the rights and responsibilities of commonhold."