Commonhold set for mixed-use developments
Housebuilders back plansfor commonhold ownership for new build flats claiming this will boost urban density by giving consumers confidence to buy such properties.
- Commonhold would ban leases giving residents outright ownership
- Mixed-use developments with offices or shops could be included
- Commonhold is widespread for apartments in Scotland, Europe and the US
Housebuilders back ban on leaseholds for newly built flats
Housebuilderssupportplansto ban leaseholdson new flats and mixed-use developmentsas they say it will help the government meet its 1.5m new homes target by 2029.
They claim dispensing with leaseholds will give people more confidence about buying new flats which tend to be in cities boosting urban density.
National Federation of Builders, NFB, policy and market insight head Rico Wojtulewicz, policy and market insight headsaid:“Commonhold could help the government meet their housing targets.
“When people feel they have a real stake in their building, consumer confidence in dense, tall buildings, essential for delivering supply in our cities, will increase and projects will have enough buyer interest in them and therefore be viable enough to build.”
Housing and planningminister Matthew Pennycook announced the changes in the commonhold white paper released this week.
“At the heart of the commonhold model is a simple principle: the people who should own buildings, and who should exercise control over their management, shared facilities and related costs, are not third-party landlords but the people who live in flats within them and have a direct stake in their upkeep,” he said.
Mr Pennycook said it was time to end the ‘feudal’ leasehold system subjecting people to escalating ground rents, unjustified permissions and administration fees and unreasonable charges.
Commonhold ownership dispenses with leases and means residents are the outright owners.
Commonhold set for mixed-use developments
Mr Pennycook said commonhold may be suitable for wider settings such as commercial blocks, or retail and industrial parks and shopping centres.
He said separate units could be sold freehold with clear rules and procedures to manage the communal amenities and spaces. A building, or estate,would be divided into sections to separate the management of different unit groups within a commonhold.
Brokers Hank Zarihs Associates said that commercial finance development lenders were comfortable with the commonhold model which is widely used in Scotland, Europe and the US.
Mr Pennycook also promised to give existing leaseholders greater rights and protections with detailed secondary legislation in the leasehold and freehold reform act 2024.
This would tackle unregulated and unaffordable ground rents, removing and protecting leaseholds from unscrupulous managing agents.
More than 5m households in England and Wales live in flats, maisonettes and apartments reveals census data for 2021 – a 21 per cent increase on the previous decade.
A draft leasehold and commonhold reform bill giving detailson how the new system would work will be published later this year.
LinkedIn Question: What potential problems do you see if flat owners are given responsibility for managing communal amenities and spaces?
