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If you're buying a flat, chances are it will be a leasehold, which means you own the property but not the building or land it sits on. Here we look at what being a leaseholder means, your obligations, the fees and charges you might have to pay and the questions you need to ask before you buy.
Buying a leasehold property means your home comes with unique rights and responsibilities. There is nothing wrong with buying a leasehold flat in theory – millions of people do – but you need to make sure you understand what leasehold means and its impact on your home before you buy.
Leasehold means that you have bought a property with a lease from the freeholder (also known as the landlord). Leasehold properties are common – they are usually flats – with 19% of English housing stock consisting of leasehold properties, according to government data.
Buying a leasehold property means you’ll enter a legal agreement with the freeholder called a ‘lease’. This tells you how many years you’ll own the property. Leases are usually long term – typically 90 to 120 years or as high as 999 years – but they can be shorter, such as 40 years
If you don’t comply with the terms of your lease, you could find the lease is forfeited and your home is repossessed by the freeholder.
Leasehold is different to owning a property outright on a freehold basis. Houses are sold as freehold which means you own the property and the land it stands on, for an unlimited period. See our guide on leasehold vs freehold for more on the difference between the two tenures.
Buying a leasehold property is more complicated than buying a freehold home but it’s a common way to own property particularly if you’re buying a flat.
If you are buying a flat, it is highly likely it will come with a lease. This is because a freeholder will own the overall building. The advantage here is that someone else is responsible for making sure the communal areas are kept up to scratch and ensuring the overall building is kept in a good state of repair. This avoids you having to get into arguments with your neighbours about keeping the hallways clean, changing lightbulbs in stairwells or weeding the shared gardens.
Another slight advantage of buying a leasehold property is you won’t have to arrange buildings insurance for your home. This is the freeholder’s responsibility but you will still have to pay. You will still need to organise contents insurance for your flat though.
There are quite a few disadvantages to buying a leasehold property that you need to be aware of before you go ahead with a purchase. The simplest way to think of a leasehold property is that you have a hybrid situation where you own a home but also have a long-term rental with a landlord. This means it will come with restrictions and extra costs.
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Leasehold issues have become more prevalent in the last decade. It’s something we have been campaigning on since 2017, with the publication of our report into Homes Held Hostage: the rise and abuse of leasehold. Shortly afterwards, a Competitions and Market Authority (CMA) investigation found “worrying evidence” of homeowners being taken advantage of. Among its findings were leaseholders who faced punitive ground rents and service charges, and buyers who weren’t told up front their property was leasehold or how much it would cost to extend a lease or purchase a freehold.
But leasehold criticism intensified following the cladding scandal. Many homeowners have faced crippling bills and been unable to sell their properties after buying leasehold flats that the freeholders refuse to make safe.
The Leasehold and Freehold Reform Act 2024 is now law – but it hasn’t come fully into force yet. Read more about the expected changes and timeline for implementation in our guide on Leasehold reform.
While we want to see leasehold banned and replaced with a fairer system which can’t be abused by unscrupulous freeholders, not all leasehold is bad. Lots of properties, from houses converted to two flats to purpose built blocks of flats can have very straightforward leasehold agreements in place and be well run. But the risks are still there when you compare to buying a house freehold – which is always the ideal form of homeownership.
The important thing when buying a leasehold property is to find a conveyancing solicitor who has dealt with leasehold before and to make sure you understand the lease and what it means for you. Ask questions, do your research and look at comments on this page to inform yourself as to what can go wrong
When buying a leasehold flat, first inquire about the remaining lease length. If it’s less than 85 years you’ll typically struggle to get a mortgage and once a lease drops below 80 years, it’s considered a short lease and is a problem because it suddenly gets more expensive to extend. You won’t want to let the leasehold expire. Then, ask about service charges, ground rent, and any planned major works. Also, check if there’s a managing agent.
Top tip: Don’t take the estate agent or vendor’s word for how long the lease is. They might have it wrong. Get the LPE1 form back as soon as possible and a copy of the lease itself so you have the facts in writing.
If you’re buying a property with a short lease with the intention of extending that lease, note that you’ll need to wait for 2 years from the date of registration at the Land Registry before you are legally able to do so. Read more about this in our step by step guide to extending your lease so you know what’s involved and can get a rough idea of the costs.
When you buy a leasehold property, you will go through the same process as if you were buying any home, but your solicitor or conveyancer will have to make some extra checks too. These include:
Most of this information will be supplied in the Leasehold Property Enquiries (LPE1) which your conveyancing solicitor will request from the company or person that administers the terms of the lease and manages the maintenance of the shared parts of the property.
Top tip: The sooner you get this LPE1 form, the better. So make sure everyone involved in the process – the vendor, the estate agent and conveyancers – knows that this is critical to you understanding whether you want to proceed with the purchase.
The seller is responsible for payment for the LPE1, which can cost from £300 to as much as £800; delays can happen if payment isn’t made quickly. The average time taken for the LPE1 to be completed by the lease administrator is 54 days. Your conveyancer will then review the pack and may have additional questions or enquiries to raise. Make sure you look at it too and ask questions if there is anything you don’t understand.
All this additional work means leasehold conveyancing takes longer and costs more than the legal fees associated with buying a freehold property. You can read more about what’s involved, how long it takes and additional costs in our guide to the leasehold conveyancing process.
Yes, if the lease is straightforward and you have over 85 years on the lease.
Getting a mortgage on a leasehold property may be harder if the lease is shorter. Most mortgage lenders won’t lend on properties with a lease under 85 years. Lenders want the lease to extend for at least 40 years after the end of your mortgage term so that the value of the property won’t be affected. However, some lenders, such as Natwest, say flexibility is allowed for properties in prime locations in central London, where the minimum lease left at the end of the mortgage should be 10 years. Values fall considerably as the lease gets shorter.
Lenders will also look carefully at onerous ground rent charges, unchecked estate charges and cladding issues (requiring an EWS1 Form) and may refuse to lend or require a higher deposit.
When you buy a leasehold property, it will come with some ongoing charges that you have to pay to the freeholder. These are the ground rent and service charges.
Ground rent is the rent you pay to the freeholder for the land that your property stands on as, technically, you own the property but not the ground underneath it. If you are buying an older leasehold property, make sure you read the lease to see how much ground rent you will be charged and whether it is set to increase regularly.
Ground rent was abolished on newly built properties in June 2022. Read more about the changes in our guide to leasehold reforms.
With a leasehold property you may also have to pay a service charge to cover your share of the cost of buildings insurance and maintaining the building. Make sure you check the lease and understand how much the service charge is, how often it has to be paid and how much it is expected to increase by each year.
Note, you still need to get your own contents insurance once you’ve moved in.
Some leases require you to also pay into a reserve or sinking fund each year. This is a pot of cash that is built up ready to cover any major works the building may need in the future such as a new roof or lift repairs.
It is important that your conveyancing solicitor checks that any ground rent or service charges that are in arrears on your property are cleared before you complete on the purchase. If you fall behind with your ground rent or service charges your freeholder could take legal action.
Buying a leasehold property means you will have to accept some restrictions on what you can do in or with your home as all leases tend to come with some restrictions. Common leasehold restrictions include:
You may also have to ask the freeholder’s permission before you undertake building work.
Top tip: Make sure you ask your conveyancer to set out in an email what your obligations are under the terms of the lease. The lease is often pages of technical legalese so you will want them to decipher it for you.
If you fail to comply with leasehold restrictions your landlord may be able to take legal action against you.
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Yes. Leaseholders had been required to have owned a property for at least two years before they could extend their lease. But in January 2025, Housing minister Matthew Pennycook, switched on a key part of the Leasehold and Freehold Reform Act, signing regulations to remove the two-year ownership rule for leaseholders of flats and houses to extend their lease or buy their freehold. Although in reality you’ll need to wait until the Land Registry application has been processed before you can serve the notice.
If the person you are buying your property from has started the lease extension process, you might be able to continue it – but you will have to ensure that the right is passed on to you when you buy the property.
Extending your lease will add value to your property and enable you to get better mortgage deals. However, it can be a very expensive process (often tens of thousands of pounds), so you have to be certain it is worthwhile doing.
See our guide to get an idea of what to expect in terms of lease extension costs.
The government has also committed to a set of leasehold reforms that will make it easier and cheaper to extend your lease. So, if you have the time to delay it may be worth waiting until the reforms come in. However, this is a risky strategy as it could still be years before the changes become a reality. There is no guarantee that the government won’t buckle under pressure by freeholders who will lose a great deal.
Yes. Buying a leasehold property with a 999-year lease is generally good. While you are still subject to the same lease restrictions, you don’t have to worry about your property falling in value as the time left on the lease reduces. You are effectively buying the property forever as the lease will outlast many lifetimes.
However, contrary to what you may see written elsewhere a 999-year lease isn’t ‘as good as a freehold’. That’s because you are still subject to a freeholder who can increase service charges, impose administration charges and put restrictions on what you can do with your home.
When you buy a leasehold property, it doesn’t have to remain leasehold forever. If you own a leasehold flat you have the right to buy the freehold of your building with other flat owners in the block. Many leaseholders group together to buy the freehold to their property.
In order to buy the freehold at least half the leaseholders in your building must take part. At the end of the process, you would:
Once you own the freehold you can set the ground rent, shop around for the best insurance and generally be more in control of your property.
If you are considering buying a leasehold property, be aware that you need to fulfil the following to be eligible to buy the freehold:
Speak to our leasehold experts for further advice on buying the freehold.
Leasehold properties are typically flats where it makes sense for a freeholder to have control of the common areas of the property and be responsible for upkeeping the areas that otherwise wouldn’t belong to any one particularly flat such as the roof. However, an increasing number of new build houses have been sold as leasehold in recent years.
There is no justification for a homebuilder to retain the freehold where only one property is built on the land. Selling new build houses as leasehold rather than freehold has now been banned but existing leasehold houses can still be bought or sold.
The most recent Government data shows that there are around 4.86m leasehold properties in England. Of these 69% are flats and 31% are houses. That means there are still around 1.5m leasehold houses in England.
Find out more in our guide to buying or owning a leasehold house.
Another issue for some leaseholders is when their freeholder is absent. You might think having a freeholder who is missing in action would be the perfect arrangement. But the reality is that an absent freeholder can cause all sorts of problems, from delaying your purchase, to difficulties and delays when you want to extend your lease or buy the freehold, or if you need their permission for home improvements. Read more in our guide to absent freeholder problems.
If you’re considering buying a property with an absent freeholder and you need a mortgage, many lenders will require you to get an Absent Landlord Indemnity Policy for them to consider lending to you. However, not all lenders will lend, even if there’s a policy in place. The larger lenders are usually more comfortable, but the smaller building societies are usually less happy to lend when there is an absent freeholder. So it’s a good idea to get advice from a mortgage broker so you know your options.
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Following the Grenfell Tower fire building safety inspections of many blocks of flats found they had been built with flammable cladding and other fire safety problems. As a result, leaseholders have been faced with enormous bills to rectify the problems with their buildings. Unsurprisingly, this has put a lot of people off buying leasehold flats. However, the government has taken steps to make it housebuilders and developers’ responsibility to fix the problems rather than the leaseholders. You can find out more in our latest post on the cladding scandal. Some lenders may request an EWS1 form, you can find out more in our guide.
In summary, the questions to ask your conveyancer when buying a leasehold property include:
No. In general, it shouldn’t be hard to sell a leasehold property. However, if you only have a short lease left on the property, particularly high ground rent, unsafe cladding or other such issues then yes, that could make it more difficult to sell.
When you sell a leasehold property, you will have to provide extra information to your buyer alongside the usual Law Society forms, notable the LPE1 form which your freeholder should complete. And your solicitor will need to request other documents from the freeholder too. You can make the process smoother by requesting those documents and filling out the extra forms as soon as you place your property on the market, rather than waiting until you have a buyer. See more advice on selling a leasehold property.
Before you start any building work on a leasehold property you should check your lease to see if what you are planning is permitted. You may find that superficial work such as redecorating is permitted, but you need to ask permission for larger jobs that could affect the structure of the building. Some leases may require you to get permission from the freeholder for any renovation work.
If you do need to get permission, you’ll need to contact your freeholder and outline what you intend to do. They are legally obliged not to withhold consent for reasonable improvements. Read our guide on how and when to get freeholder consent. And don’t forget, if your works impact on a shared wall with a neighbour, you’ll need a Party Wall Agreement.
Selling new build leasehold houses has been banned by the government. But for many years developers where selling new build houses as leasehold and these will still be bought and sold so it is still possible to buy a leasehold house. Find out more about the pitfalls of buying a leasehold house and what to do if you own one in our guide to leasehold houses.
Leasehold properties go up and down in value in the same way freehold properties do. However they tend to decrease in value if the remaining years left on the lease fall under 90 years left. It is possible to increase the value of your leasehold home by extending the lease or buying the freehold. But it is worth speaking to a leasehold expert before you begin to make sure you’ll increase the value of your property sufficiently to cover your expenses.
It is also possible to boost the value of your leasehold property in more traditional ways such as redecorating or improving energy efficiency. Read our top tips to prepare your home for sale and potentially boost its value.
Valuers working on lease extensions sometimes use a formula to work out how much a flat with a short lease is worth compared with a long lease. These estimates usually suggest a flat with 70-years left on the lease will hypothetically be worth about 88% of a flat with a really long lease.
In practice this can’t be relied upon. Generally, a short lease flat is worth what someone will pay for it. An informed buyer will think about how much they would pay if the flat had a long lease. They’ll then deduct the anticipated cost of the lease extension – including the professional fees associated with the transaction. They will knock extra off the sale price for the hassle and risk of doing a lease extension. For more information see our guide on buying a flat with a short lease.
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