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If you’re buying or already own a flat, you may come across the term share of freehold. But what does it mean, and how does it differ from leasehold or full freehold ownership? This guide explains how share of freehold works, your rights and responsibilities, and common problems before you buy.
KEY INFORMATION
| What it is: | A type of ownership that means you own your flat on a leasehold basis, but also jointly own the freehold of the building and the land it stands on. |
| Main benefits: | Greater control, easier lease extensions, and no external freeholder. |
| Key drawbacks: | Shared responsibility for admin and potential disputes. |
Key difference: with a share of freehold you jointly own the building and land, while with leasehold you don’t.
| Leasehold property | Share of freehold |
|---|---|
| You own your flat for a fixed number of years under the lease, but not the land or building. | You still own your flat under a lease, but you also own a share of the building and land. |
| Lease extensions can be costly and complex. | Lease extensions are typically simpler and cheaper. |
| The freeholder or managing agent sets the service charge and may also collect ground rent. | Co-owners agree the service charge together and usually no ground rent is payable. But you’ll still need to pay to maintain the building. |
| The freeholder normally arranges insurance. | You and your co-owners must arrange building insurance together. |
It’s also important not to confuse a share of freehold with full freehold ownership.
With freehold, you own both the building and the land outright, and typically applies to houses. With a share of freehold, ownership is joint and typically applies to flats.
In short: freehold means full individual control; share of freehold means joint control with a lease still in place.
| Freehold | Share of freehold | |
|---|---|---|
| Typical property type | Houses | Flats |
| Lease involved? | No | Yes – still leasehold. But leaseholders also own freehold share. |
| Control over property | Full individual control | Shared decision-making. Terms of lease will apply. |
| Insurance | Owner arranges insurance individually | Collective insurance for the block |
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There are two basic setups for the ownership of shared freehold:
This means when you obtain a share in the freehold, you’ll either be named on the title deeds or issued a share in the company that owns the freehold. Either way, you will own a share in the freehold.
If you’re buying a flat, the benefits of buying a flat with share of freehold are clear. But there are some potential downsides you’ll need to weigh up too:
| Pros | Cons |
|---|---|
| Gives the flat-owner a direct say. | Collective decision-making can lead to deadlock over decisions. |
| Don’t need to deal with freeholders who may be difficult. | Disagreements with fellow freeholders can become neighbour conflicts. |
| Lease extensions may be easier and in some cases much cheaper. | Owners must handle building insurance and paperwork. |
| Better long-term property value protection due to ease of extending lease and popularity with buyers. | Without proper structure, management can become a share of freehold nightmare. |
Here are some of the common problems shared freeholders may face:
1. Disagreements between owners over maintenance, insurance or service charges.
2. One or more owners refusing to pay their share of costs.
3. Admin failures such as missing company filings or having an invalid building insurance policy.
4. You may still have to pay for lease extensions, since the right is not granted automatically, warns the Leasehold Advisory.
How to avoid these problems
Share of freehold flats can be more appealing to buyers, but this will largely depend on how well the building has been managed.
Jeremy Leaf, founder of a long-established North London estate agency, Jeremy Leaf and Co, and former chair of the Royal Institution of Chartered Surveyors, says share of freehold ‘may make the property more saleable but won’t necessarily add to value. Much will depend on the individuals involved and their history of addressing repair and management issues.’
Quick Definition: Collective enfranchisement is the legal right under the Leasehold Reform Housing and Urban Development Act 1993 allowing leaseholders to jointly purchase their freehold and create a share of freehold structure.
If you own a leasehold flat, you have a joint right, with other flat-owners in the block, to buy the freehold of your building. This is known as a right of “freehold enfranchisement”.
But you can’t do this alone – you have to get your neighbours involved. The law allows at least half of the leaseholders to come together to buy the freehold of the block from the freeholder/landlord.
Buying the freehold may appeal to you, for example if you:
However, exercising your right to buy the freehold can be complicated.
Read more on this in our guide Should I buy the freehold?
The cost of buying the freehold varies but almost always gets more expensive the shorter your lease.
You’ll need to pay your flat’s share of:
Get expert advice on extending your lease, buying your freehold or applying for the right to manage.
When you own share of freehold, you’ll still be a leaseholder and you may wish to extend it, especially if it’s close to 80 years which is considered a short lease.
You can extend the lease by agreement with your fellow shared freeholders usually for a nominal amount, although you’ll need to pay legal costs. Most owners extend their lease to 999 years.
However, as the Leasehold Advisory warns, you may still have to pay for lease extensions, because the right is not granted automatically.
| Leasehold with third party landlord | Leasehold following Right to Manage | Leasehold, share of freehold | Commonhold | |
| Ownership lasts forever | No | No | Yes – may need to grant new lease | Yes |
| Control over your home | Low limited by landlord | Medium | Medium | High |
| Third party landlord | Yes | Yes | No | No |
| Ground Rent | Yes, according to individual leases | Yes, according to individual leases | Yes, according to individual leases | No |
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– A share of freehold means you own your flat on a leasehold basis, but you also jointly own the freehold for the building with the other flat owners.
– Together, you act as the freeholder – controlling how the building is managed, insured, and maintained. You still have a lease, and you must follow its terms even though you own part of the freehold.
A share of freehold can be better than a standard leasehold because it gives owners more control over building management, service charges, and lease extensions.
However, it also means shared responsibility for maintenance and legal compliance – so success depends on good cooperation between owners.
Yes. Even with a share of freehold, leaseholders still pay service charges to cover repairs, maintenance, insurance, and management of the building.
The difference is that you and your co-owners decide how much to charge and what the money is spent on, rather than an external freeholder.
With a share of freehold, the freeholders (you and your co-owners) are responsible for arranging building insurance for the whole block.
Each flat owner then pays their share of the premium, through the service charge.
Yes. You can sell your flat in the normal way, and your share of the freehold is transferred to the buyer. Buyers often find share of freehold flats more attractive because of the control they offer.
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