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The difference between leasehold and freehold is important to understand. It can impact everything from your legal rights, responsibilities, control and costs to resale value. Here's what you need to know.
There are two fundamentally different forms of legal ownership: freehold and leasehold.
| Freehold | Leasehold |
|---|---|
| You own the property and the land it’s built on | You own the property for a fixed period but not the land |
| Ownership is indefinite | The lease has a fixed term, such as 99 or 125 years |
| You’re responsible for maintenance and upkeep of the property | Your freeholder is responsible for maintenance. You’ll pay for this via your service charge. You may have to pay ground rent too. |
| Typical for houses | Typical for flats |
| You must arrange your buildings insurance | Buildings insurance usually arranged by freeholder |
Owning a freehold property means that you own the building and the land it stands on outright, in perpetuity.
Houses are usually freehold. Although there are some leasehold houses, jump to more on this. So check the tenure of your property before you buy.
Freehold is pretty much always the preferred option: you can’t really go wrong if you buy freehold. Although owning the freehold means you’ll be responsible for maintaining you property. So you’ll need to factor that into your budget.
Leasehold means to own a property for a fixed amount of time, leasing it from a landlord who owns the whole building and the ground it sits on.
Leases are usually long term – often 90 years up to 999 years. But you may see much shorter leases, such as 40 years.
When the lease expires, the property goes back to the freeholder. However, you can usually extend the lease.
While the ideal situation would be to own a freehold property, if you’re looking to buy a flat in England and Wales then it is 9 times out of 10 likely to be sold as a leasehold.
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Buying a leasehold property has a number of drawbacks but leasehold properties are common – they are usually flats – with 19% of English housing stock consisting of leasehold properties, according to government data. And many people own and live happily in leasehold flats.
As with most things, the devil is in the detail. The key is to know what you’re looking for – read on for more on this.
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When you buy a freehold property, you’ll own it in perpetuity. But this isn’t the case with leasehold properties. It’s crucial to find out how long the lease is because if a lease is 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 under current rules because the lease extension process suddenly gets more expensive. This is because once your lease is below 80 years, when you extend your lease, you must pay half of the amount the property will increase in value by due to the longer lease. This is known as marriage value.
The Leasehold and Freehold Reform Act 2024 abolished marriage value but this has yet to come into effect and is currently being challenged in court. Find out more in our guide on leasehold reforms. So the existing rules on marriage value currently stand.
A short lease will also make it harder for a future prospective buyer to get a mortgage, as many lenders won’t lend on flats with a lease already below the 80-year mark.
In terms of costs to buy your share of the freehold you will need to pay your flat’s share of:
All other things being equal, the shorter the lease, the less it is worth. The value of long leases stays fairly stable, but under the current system, the value of short leases can drop rapidly.
When the term of the lease drops to zero years, the leasehold expires and the property reverts to the freeholder.
However, in reality, most leases don’t expire because they are extended well before the lease runs out. But this doesn’t happen automatically. So it’s important to find out how long is left on your lease and take action, if required. Read What happens when a leasehold expires?
Get expert advice on whether now is a good time to extend your lease or buy your freehold
Get expert advice on extending your lease, buying your freehold or applying for the right to manage.
Unlike if you buy a freehold property, buying a leasehold property involves paying additional costs. There are three types of leasehold charges:
However, whether you buy a freehold or leasehold property, you may need to pay estate management charges for the upkeep of shared spaces.
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Houses should always be freehold.
But leasehold houses do exist. We called for a ban on the sale of new build houses as leasehold in our 2017 report Homes Held Hostage. Later that year, the government pledged to introduce the changes.
Most developers took this pledge seriously and stopped selling new houses as leasehold. The proportion of new build leasehold houses rose from 7% in 1995 to a peak of 15% in 2016, down to less than 1% in December 2022. The Leasehold and Freehold Reform Act 2024 finally sets that commitment in stone by including a ban on the sale of leasehold houses in England and Wales (other than in exceptional circumstances).
It is common to have tension between freeholders and leaseholders. Such as:
The Property Ombudsman said it received 6,649 enquiries about residential leasehold in 2024, a 67% year-on-year spike with many homeowners concerned about the fairness of service charges, which in most cases must be redirected to a court or tribunal.
An absent freeholder can also cause problems, including issues if you want to extend your lease or buy the freehold, to selling your property down the line. Read more in our guide to Absent freeholder problems
Freeholders complain leaseholders breach the terms of their lease. For example, by making too much noise or not getting permission for building works.
Commonhold was introduced into the UK under the Commonhold and Leasehold Reform Act 2002. However, according to Matthew Pennycook, Minister of State for Housing and Planning, ‘for a variety of reasons it failed to establish itself and is now out of date.’
The government’s White Paper which was published in March 2025 intends ‘to reinvigorate commonhold through the introduction of a comprehensive new legal framework based on the vast majority of the recommendations made by the Law Commission in their 2020 report. This new legal framework will be supplemented by a ban on the sale of new leasehold flats, so that commonhold becomes the default tenure.’
Commonhold provides freehold ownership for flats and other interdependent buildings. This means you’ll own the property indefinitely unlike leasehold where you’ll own it for a fixed period.
You’ll share ownership of the communal areas through a commonhold association, which all unit-owners are members of and jointly control.
Instead of having a lease there will be a Commonhold Community Statement, that defines the rights, responsibilities, and rules for all unit owners. This is a set legal framework that cannot be altered. Bookmark our page on Leasehold Reform to stay up to date on this.
Get expert advice on extending your lease, buying your freehold or applying for the right to manage.
Freehold is pretty much always the preferred option. With freehold, you own the building and the land it stands on indefinitely. But with leasehold, you own the property, not the land, and only for the length of your lease agreement with the freeholder. Plus, you’ll need to pay leasehold charges too.
There are lots of downsides to buying a leasehold property, but if you’re buying a flat, you’ll probably find most of the flats on the market are leaseholds. The key is to be fully aware of the length of lease, any leasehold charges and any other important factors that your conveyancer should flag to you. Read more in our guide on Buying a leasehold property.
To find out whether your house is freehold or leasehold, you should check your deeds. Alternatively, you can search for your property at the Land Registry.
A flying freehold is a freehold property built over land that doesn’t form part of the property, such as if a freehold property overhangs another. For example, this could include rooms built across passageways or basement vaults.
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