Government proposals to replace leasehold with commonhold tenure could encounter significant challenges, property experts have warned. Concerns regarding mortgage lending, building management, and the costs associated with converting properties must be addressed by ministers.
These issues were highlighted at the Association of Leasehold Enfranchisement Practitioners (ALEP) annual conference on 14 October. Property lawyers, valuers, lenders, and managing agents examined the practical implications of the draft Commonhold and Leasehold Reform Bill.
A key concern is the cost of converting existing leasehold buildings to commonhold, with questions remaining on how leaseholders would fund these changes. Lenders will also require assurance that commonhold properties offer adequate security before providing mortgages.
Delegates also discussed the financial responsibilities of commonhold ownership. Buildings will still require maintenance, insurance, and compliance with safety regulations, necessitating adequate reserve funds and competent management from commonhold associations.