A major shift is moving through Parliament in 2026. Here's what freehold, leasehold and commonhold mean — and what's about to change.
# The End of Leasehold? Commonhold Explained Simply
If you own a flat, or hope to buy one, you may have heard the word "leasehold" and felt confused. You might also have seen news about big changes coming. Don't worry. This guide explains it all in plain English.
A major shift is moving through Parliament in 2026. It could change the way millions of people own their homes. Let's walk through what it means.
## First, the three types of ownership
To understand the change, you need to know three simple words: freehold, leasehold and commonhold.
**Freehold** means you own the building and the land it sits on, fully and forever. Most houses are sold this way. There is no time limit and no landlord above you.
**Leasehold** is different. You own the right to live in your home for a set number of years, but you do not own the land. Someone else, called the freeholder, owns that. Most flats in England and Wales are sold this way. You often pay them a yearly fee called ground rent, plus charges for looking after the building.
**Commonhold** is the new idea at the heart of these changes. We will come to it shortly.
## Why is leasehold a problem?
For many people, leasehold has caused real stress and cost. There are around five million leasehold homes in England and Wales, so this affects a lot of families.
The main problems are well known. Ground rents can rise over time, sometimes sharply. Service charges, which pay for things like repairs and cleaning, can be high and hard to understand. And because the freeholder is in charge, residents often feel they have little say over their own building.
There is also the issue of the lease running down. As the years on a lease get shorter, the home can become harder to sell and more costly to fix through a "lease extension." The government has called parts of this system unfair and out of date.
## What is commonhold?
Commonhold is the fix the government wants to bring in. It is a fairer way to own a flat.
Under commonhold, you own your flat outright, with no time limit and no expiry date. There is no separate freeholder sitting above you. Instead, all the flat owners in the building share ownership of the shared areas, like hallways, lifts and gardens.
The building is run by a "commonhold association," which is simply a group made up of all the owners. Decisions about budgets and repairs are made together, by vote. There is no ground rent to pay, and the service charges are controlled by the owners themselves. In short, the people who live in the building are the ones in charge of it.
This idea is used widely in other countries. It has existed in the UK since 2002, but was barely used because the old rules made it hard to set up. The new plans aim to fix that.
## What is actually changing?
In 2026, the government published a draft Commonhold and Leasehold Reform Bill. It sets out several big changes. Here are the main ones in simple terms.
First, the plan is to **ban most new leasehold flats**. In future, new flats would be sold as commonhold instead. The aim is to make commonhold the normal way to buy a flat.
Second, for people who already have a lease, **ground rents would be capped at £250 a year**. After 40 years, this would fall to almost nothing (a tiny amount called a "peppercorn"). This protects existing leaseholders from rising charges.
Third, the plan would **scrap forfeiture**. This is an old power that, in extreme cases, let a freeholder take back a home over a small debt. It would be replaced with a fairer system.
Fourth, it would become **easier for existing leaseholders to switch to commonhold** if enough of them agree. The plan is to allow conversion when at least half of the qualifying owners want it.
## When will this happen?
This is where you need a little patience. These changes are big, so they take time to get right.
The draft Bill is still being checked and improved by Parliament. An updated version is expected to be introduced in autumn 2026, with the hope of becoming law by the middle of 2027.
Some parts will come in later than others. The ground rent cap, for example, is likely to start around late 2027 or 2028. And the ban on new leasehold flats may take longer still, possibly not until around 2029. So this is a steady process, not an overnight switch.
## What does it mean for you?
Let's make this practical, depending on your situation.
If you **already own a leasehold flat**, you do not need to do anything right now. Your current lease stays as it is for the time being. But the planned ground rent cap and other protections should help you over time. If you were thinking about extending your lease, it may be worth getting advice on whether to act now or wait.
If you are **thinking of buying a flat**, it is worth understanding whether it is leasehold or commonhold, and asking about the ground rent and service charges before you buy. These costs can vary a lot, so always check the details.
If you are a **landlord or investor**, keep an eye on the changes, as they will shape how new flats are sold and managed in the years ahead.
## The bottom line
Leasehold has caused worry and cost for millions of people. The move towards commonhold is meant to give homeowners more control, fewer surprise bills, and a fairer deal.
The changes are coming, but step by step rather than all at once. The key thing for now is to understand the words, know your own position, and ask questions before you buy. With clearer rules on the way, owning a flat should become simpler and fairer in the future.
*This article is for general information only and is not legal advice. The law in this area is changing, so always check the latest official guidance and speak to a qualified professional about your own situation.*