Commonhold tenure in landlord’s future
- Published: Tuesday 25 May, 2021
- By: Commercial Trust
A new government-created committee has been launched to introduce Commonhold tenure, a form of freehold ownership.
This type of freehold ownership is largely used for flats or other interdependent buildings.
The difference is that there is no third-party landlord, and the owners of the flats themselves have shared control over the management of the building and associated charges.
The new committee, known as the Commonhold Council, has been established to “advise the government on the implementation of a reformed commonhold regime".
There are four points on which the council will focus:
- Implementing the government’s vision for the widespread take up of commonhold
- Identifying the necessary steps to prepare the market and deliver supporting infrastructure
- Supporting consumers to understand their needs and raise awareness and promote commonhold
- Ensuring commonhold can provide a workable alternative to leasehold in as many settings as possible
Forms of commonhold can be seen around the world in Australia, New Zealand, the USA, Canada and many cities in Europe.
A government statement says:
“Commonhold gives homeowners more autonomy over the decisions that are made. They are in control of their building in what is known as the building’s ‘commonhold association’.”
Robert Jenrick MP, Housing Secretary added:
“We want to give homeowners across the country the autonomy they deserve. The new Commonhold Council launched today will – together with leasehold groups and industry experts – pave the way for homeowners in England to access the benefits that come with greater control over your home.”
“The widespread introduction of commonhold builds on our work to provide more security for millions of existing leaseholders across England, putting an end to rip-off charges and creating a fairer system.”
What does this mean for landlords?
As the commonhold tenure applies mainly to interdependent buildings such as blocks of flats, this may be good news for landlords.
More say in the running of the building and the ability to maintain and affect change outside of the flat they owned could increase the rental value of the property.
Under commonhold, there are no hidden costs or charges which may be useful in calculating rental yield and upkeep costs more effectively.
Some landlords may see this as an opportunity to get involved as directors of the board or directing a managing agent to look after the building instead.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.