The government wants to make leasehold ‘easier and cheaper’. That’s the headline. It is a virtuous message, politically useful and broadly appealing. But the reality beneath it is more complicated. The Commonhold reforms, as proposed in the Commonhold White Paper do not eliminate cost - they shift it. And the shift is squarely onto the shoulders of individual flat owners.

The story here is not about cheaper ownership, it is about cost visibility. After all, 80% of the reformers’ rhetoric is focused on rip-off landlords and their agents. So when the true cost of ownership becomes visible, the value of a flat may just need to be repriced.

The real costs never went away - they were just out of sight
Under the current leasehold system, freeholders carry at least some of the burden - capital expenditure forecasting, and the general risk of the building is on their shoulders. Under Commonhold, that burden is passed to flat homeowners.

That may sound like a fair trade - homeowners having more control and more responsibility. However, the financial implications are real. Remove any landlord monkey business, and under Commonhold the capital costs of running a building do not get smaller just because they are now split among Commonhold flat owners. They likely just become harder to manage, as each owner in the cooperative has a different agenda and vision of how they see their building being run. And as a wake-up, the costs are more immediate.

Under Commonhold, there is nowhere to hide. Lift failures, insurance hikes - it all lands on the owners. And here is the part most reformers do not want to say out loud: those that will show up in service charges, reserve fund contributions, and ultimately, in property prices.