Leasehold vs Commonhold: What is the difference?on
The Commonhold Act came into force in 2004, which created an alternative method of home ownership. This however, in the last 14 years has been little used.
Commonhold allows people to own their own homes with no Landlord or expiring lease. Residents are members of the management company allowing them to vote on matters of upkeep etc.
The Law Commission wants Commonhold to be more widely available in England and Wales.
The reforms they are planning include the following:
- Commonhold to be extended to include both residential and commercial units
- Make it easier to convert from Leasehold to Commonhold
- Increase Lender confidence in Commonhold increasing the choice of mortgage lenders available
- Replace service charges with commonhold contributions which have to be approved by residents
One point to bear in mind is that it can be time consuming and complex to manage a building and residents should consider carefully whether they have the time and expertise in this area. They could of course engage the services of a property manager to advise them.
Time will tell if these initiatives lead to more Commonhold ownership and less Leasehold.
To read more articles on the property sector from Nick Symes, Director of Property, please visit: