The draft Commonhold and Leasehold Reform Bill: why housing associations should engage now

The government has now published its draft Commonhold & Leasehold Reform Bill. The Bill is a significant step, as it proposes to make commonhold the default tenure for privately owned flats and end the leasehold system. To make this happen, the new sale of new leasehold flats could be banned from 2029, and a new process introduced so existing blocks of flats can convert to commonhold. 

Commonhold aligns closely with values that the housing sector holds in high regard—transparency, resident involvement, and empowerment. Yet, whatever its merits, the shift toward making commonhold the default tenure for privately owned flats presents challenges for housing associations that cannot be ignored. 

What does the draft Bill mean for affordable housing? 

The draft Bill includes provisions for affordable housing, but these are focused on exempting certain lease types from the ban, like shared ownership leases. While welcome, there is still a lot to consider about how this will work, and the implications for funding and development.  

It also doesn’t address the reality that most new homes developed by housing associations will be for rent. We need to fully understand what a commonhold structure means for those rented homes. 

Housing associations will continue to develop new blocks and estates, but under commonhold they may retain a proportion of rented homes while losing control over how the wider block or estate is managed. The sector is already uneasy with this dynamic, shaped by our experience of managing affordable housing on third-party owned developments acquired through Section 106 agreements. 

Recent regulatory codes and standards have brought this into sharp focus. The Regulator of Social Housing expects providers to meet these standards for all residents—regardless of whether the association owns or manages the block. In effect, we are being held accountable for the performance of entities over which we have limited influence. 

Many housing associations are now reassessing the complexity and risk this creates. Some are concluding that the approach is no longer desirable.  

Commonhold: more influence, but also more exposure 

Under commonhold, housing associations would be Unit Holders and therefore entitled to participate in the governance of the Commonhold Association. This is the legal entity that will be responsible for the management of the building and estate. However, the scale of involvement could be unprecedented. 

We often imagine commonhold governance in the context of an owneroccupier engaging with their own Commonhold Association. Housing associations could find themselves members—and potentially directors—of tens, hundreds, or even thousands of Commonhold Associations. 

This raises fundamental questions about our role, responsibilities, and risk exposure. 

Governance, assurance, and conflicts of interest 

Housing associations will need to consider: 

• The governance and assurance implications for Boards and executives who become members or directors of Commonhold Associations. 
• Conflicts of interest, particularly when the best interests of the Commonhold Association diverge from the best interests of our tenants or our organisation. 
• Voting dynamics, especially in mixedtenure blocks where the association does not hold a controlling share. Retaining a controlling share may itself undermine the value and credibility of the commonhold model. 

Strategic and operational implications 

If housing associations are to act effectively as Unit Holders or directors, we may need to rethink service models and workforce structures. This must be balanced with maintaining highquality landlord services for our existing rented homes. 

We also need to understand how our obligations under the Regulator’s Standards will align—or clash—with the practical realities of operating within a commonhold estate. 

While the draft Bill allows for differentiated voting rights between housing associations and shared owners, the wider organisational implications are significant. Increased governance, assurance, and operational responsibilities can drive-up costs and potentially translate into higher management fees. 

There is a great deal for housing associations to weigh up as commonhold becomes more prevalent. It is entirely conceivable that, after assessing the risks and responsibilities, some providers may conclude that developing mixedtenure communities is no longer viable. 

What you can do 

The good news is that the government is listening. The Moving to Commonhold consultation is a vital opportunity for housing associations to submit their views on proposals to ban new leasehold flats and implement commonhold. 

Given the potential impact of commonhold, and the ban on leasehold flats, on the housing sector, it is important that we make sure we fully understand what is being proposed and that our views are heard. You have until 24 April 2026 to respond to the consultation and have your voice heard.