Is a Share of Freehold the Same as a Commonhold?

Whilst they share some similarities, important practical and legal distinctions remain.

In practice, the confusion between share of freehold and commonhold rarely costs people a legal argument. It costs them money at the point of sale. Imagine a buyer shown a two-bedroom flat in East London described by the agent as ‘commonhold: no ground rent, full ownership, no lease issues.’ The buyer makes an offer. Their solicitor reviews the Land Registry title and finds a share of freehold structure with an underlying 1986 lease, extended to 2111, but still containing a ground rent clause of £150 per year doubling every 25 years. The buyer’s lender flags it. The sale pauses.

Regularising the lease to peppercorn can cost the seller several thousand pounds and delay completion by weeks. The language used by estate agents and the legal reality on the title are frequently different things.

Is a share of freehold the same as a commonhold?

No, shares of freehold and commonhold are not the same. A share of freehold refers to the method of ownership where a group of owners collectively purchase the freehold of a property but hold individual leases in respect of the flat(s). The crucial element of a share of freehold is therefore that each flat owner retains a lease, and as each lease is a separate legal title there can often be differences between the leases and hence their rights and obligations may differ. Freeholders pay a ground rent, but have a long term freehold for perpetuity (999 years).

Commonhold is a separate form of property ownership introduced as an alternative to leasehold ownership, where every unit owner (100% of all the flats) owns their property outright with no lease, and all unit holders jointly manage the building through a Commonhold Association, which is a company limited by guarantee. There is a single document called the Commonhold Community Statement that serves the same purpose as a lease, outlining the rights and responsibilities of the building’s owners.

What is a Share of Freehold?

A share of freehold is when leaseholders (typically flat owners) join together to purchase the freehold (land, airspace and fabric) of their building. Usually, this involves forming a limited company or group to own the freehold estate. Each leasehold property would still be individual long-term leases with all the usual rights and obligations.

How It Works

• Flat owners purchase the freehold via a company or as joint freehold owners.
• Leases for individual flats still exist, maintaining certain rights and obligations.
• The day-to-day management of the freehold could be taken care of by the management company or the freehold held by the property owners as a company or an agent.

Benefits

• All the owners would be able to make decisions collectively about maintenance and improvements to the property as well as the building’s reserve fund.
• May result in lower ground rents and service charges, as there’s no external commercial freeholder seeking profit.
• The owners may be able to obtain long lease extensions directly from the original leaseholder(s) at minimal legal cost to extend the lease.

Challenges

• Collective management can result in disagreements among individual property owners regarding expenses and maintenance standards.
• In share of freehold properties, each flat remains a leasehold property so the terms and conditions of the lease still apply and owners are still responsible for fixed terms set out in the lease.
• The lease term would remain the same as set out in the original lease together with any subsequent variations as per leasehold legislation.

What is a Commonhold?

In the majority of cases the freehold of the Commonhold property would be held jointly by the owners, with sole freehold ownership of the part of the property that they own. It is responsible for the repairs, the building insurance and all the other things which would normally be covered by a lease and dealt with by the landlord. All owners of units are automatically members of the commonhold association, a company limited by guarantee which is owned by the members (the unit owners).

Key Features

• The company is run by the members.
• The owners may also participate in the management of the property through a commonhold association.
• The commonhold association owns the whole property and all the units pay a fair share of the costs to the association.

Benefits

• No need for lease extensions, removing a major burden typical for those who own leasehold flats.
• Direct, democratic control over building management decisions for all individual units.

Limitations

• The concept of commonhold ownership is rare in England and Wales and despite being introduced in 2002 there are few examples of buildings that use this system.
• Mortgage lenders often have limited options for commonhold property, making it harder to buy or sell such commonhold units.
• Commonhold requires full and consistent participation by all holders of units in the building and can be difficult where there is an inability to agree as to how costs of parts of the building owned in common and the use of facilities should be divided.

Why Share of Freehold is more common than Commonhold

Share of freehold remains prevalent because most professionals and financial institutions are familiar with leasehold law and processes. Most people in the property world are familiar with the Leasehold model and the procedures involved, whereas the commonhold model is less well understood; the commonhold block model has yet to be tested in practice. While commonhold aims to simplify ownership, it remains largely untested in practice, introducing uncertainties around management, lender support, and dispute handling. By contrast, share of freehold is a mature, well-understood model.

The lender risk is not just theoretical. As of 2025, several major UK mortgage lenders still treat commonhold as a non-standard security and will either decline applications or apply additional conditions. For buyers relying on conventional high-street mortgages, a commonhold property can be harder to finance than a standard leasehold flat, even if the legal structure appears cleaner. Share of freehold, by contrast, is widely recognised by lenders and carries no such risk.

The Freehold Collective’s Perspective

While both share of freehold and commonhold grant leaseholders and property owners greater control, share of freehold is currently the more practical and accessible option for most seeking to transition from leasehold houses or existing leasehold buildings. Share of freehold is therefore the method that The Freehold Collective supports, helping groups of residential leaseholders through the collective enfranchisement process.

Anyone considering collective purchase should seek specialist legal advice for their situation. Start with the Freehold Purchase Calculator or contact us for a free consultation for actionable next steps.

Book a free consultation association owns and maintains the whole building, ensuring all units contribute fairly to shared obligations.