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Living in a Leasehold House: What you need to know

While leasehold is a common form of tenure for flats, it is increasingly applied to new build houses as well. So whether you’re thinking of buying a house which is leasehold – rather than freehold – or have realised your house is leasehold now that you’ve moved in, we look at what you need to know before you go any further.

What you need to know about living in a leasehold house

What’s the problem?

In our view at the HomeOwners Alliance, there is no reason why houses should be sold as leasehold. There is no justification for a homebuilder retaining the freehold – the legal ownership f the land on which the house stands – when only one property is built on that land. Yet it’s a practise that is happening more often than you might think and one which serves the interests of freeholders at the expense of leaseholders.

It can be the case that houses sold as leasehold are sold with high ground rents (that double every 10 years) and onerous fees that must be paid to the freeholder for licences and permissions included in the clauses of the lease.

It is also a sad state of affairs that the vast majority of buyers of leasehold houses have found that their freeholds have been sold to large institutional ground rent investors and these investors are now asking for hugely inflated sums (£40,000!) to sell them the freehold to their homes. It’s nothing short of scandalous and something we raise in our report Homes Held Hostage.

I own a leasehold house: what are my options?

First off, you should consider suing your conveyancing solicitor for professional negligence

This seems like a drastic first step, but if you weren’t alerted to the fact your house was leasehold then your solicitor or conveyancer was negligent in not making you aware. You’ll need to be up for a battle; after all they do this for a living. It is not enough to believe or feel that you were inadequately advised, it is all about how much proof you have.

Your first job is to get a copy of your file from the solicitor who advised you when you bought your house. You can do this yourself by simply writing to your solicitor or you could instruct a solicitor to do this for you. Be prepared to wait: your solicitor has to provide you with this report but there is no legal timeframe for them to do this by.

The most important document is something called your “Report on title”. This is the report on the pros and cons of you buying this property. This is the document that could give you the proof you need to sue your conveyancing solicitor. The most important bit of your file to look for is the part where it explains the ground rent ground in your lease and the implications it will have for you in the future.

You will also need to check all the documents in your file as well to see if any other documents your solicitor provided you in your report included advice on the ground rent of the lease, and:

  • If there is no mention of ground rent or their implications you could have a very good chance of suing.
  • If your file shows the solicitor simply states your ground rent is “£250 per annum” with no other advice you may still have a case to win.
  • If it says “Ground rent is £250 and doubles every 10 years” but does not offer any other advice you may still win but a solicitor will try to assert they did advise you.
  • If your file says “Ground rent is £250 doubling every 10 years and this could be bad” then your chances of success are reduced even further as the solicitor will insist they had properly advised you.

Second, consider buying the freehold of your home

Broadly speaking there are three different ground rent schedules for leasehold houses.

  • Doubling ground rent every ten years. This is by far the worse one and is considered onerous.
  • Doubling every 25 years. This is not as bad and is not considered onerous.
  • Linked to RPI. This essentially means the ground rent you pay is linked to inflation and technically you pay the same amount each year forever more.

You need to keep in mind however that all these ground rent options are totally needless and exist for the sole purpose of creating an asset class for the ground rent investors. By buying your freehold you could free yourself from these unpredictable and unfair fees. Under the 1967 Leasehold Act you have a legal right to force your freeholder to sell you the freehold of your home.

To work out how much it should cost you need to calculate the total ground rent you owe your freeholder for the remainder of your lease, taking into account inflation and the capitalisation rate. We advise you get dedicated advice from experts in calculating a ballpark figure before you formally start the process.

But buyer beware: Avoid informal agreements with the freeholder

Once you know where you stand on likely cost of buying your freehold, you will want to contact the freeholder to get the process started. At this point your freeholder may offer you the opportunity to bypass the process of buying a freehold using a formal process with lawyers and may suggest an informal agreement. This almost always leads to a worst deal for you the leaseholder and should be avoided at all costs. Remember your freeholder has bought your freehold to make money.

Furthermore, buying your freehold ‘informally’ from your freeholder places you outside any legal protection you would have if you acted inside the 1967 Leasehold Act. Your freeholder can negotiate the very best deal for themselves on the freehold transfer and there is nothing you can do to remove anything from the contract you don’t like, it’s a take it or leave it deal.

Finally, buy your freehold as part of a group using your statutory legal right under the 1967 Act.

The very best thing you can do is to buy your freehold as part of a group with your neighbours acting at the same time. The bigger the group the more money you will save. There is an economy of scale when you act as a group but it will also give you formidable negotiating power against your freeholder when trying to agree a fair price.

When choosing a solicitor or valuer in the process find one signed up to ALEP which has a code of practice and where members have to prove their expertise in freehold purchasing

Advice provided by Louie Burns, managing director, Leasehold Solutions

Leave a comment (21)* Required

  1. Jerry DeeksJerry Deeks

    I own a leasehold terrace house. A group of us are interested in buying the freehold. However at the rear of the ground floor there is an area of 4 sq metres aprox which is beneath the property behind. I understand the general rule about vertical separation but would this automatically disqualify us or is there room for negotiation in a case like this?

  2. Janet PitmanJanet Pitman

    My parents bought their house in the 1960s and over the years the leaseholder has died. His widow thought she owned the lease so my parents continued to pay the ground rent to her for a time. When they asked to buy the lease from her we found out that she had not inherited it after all. We do not know what happened to the lease, it appears his companies were dissolved and there is no record of what happened to the lease. Land registry now inform us that the council have appropriated the lease but they will not reply to our solicitors requests to purchase it. Any advice would be appreciated.

  3. E. LawlorE. Lawlor

    My parents have lived in their house for 45 years & have paid off their mortgage. They have been paying ground rent & have realised that they have’nt received any correspondence for approximately the last 8 months. They were originally paying to Dixons who were completely unhelpful. We have since discovered that the registered owner is now Mayfly ( Corrib ) Ltd. What is our next step in finding out how much they owe & the price in purchasing the freehold. My parents are elderly & are getting quite concerned & worried. Many Thanks

  4. GuyGuy

    Why not make clear in your article that there is a very different type of leasehold house in North West England (and elsewhere) – historical leasehold – in which the rent is fixed at a very small amount and the only issues are restrictive covenants (which can apply equally to freeholds).

  5. Lee CarrollLee Carroll

    I am currently in discussions with the builders solicitor regarding the transfer of a leasehold for a garage into my name.
    The garage is detached from the property, the property itself being freehold.
    The reason the garage is leasehold is that it is the lower portion of a coach house, for which the owner holds the freehold.

    The builders ‘property management’ company and solicitor have been charging me ground rent for the previous 8 years on a leasehold which currently resides with the builder. Why does this sound like I have been fraudulently charged for a lease which I don’t actually hold?

    Any advice on how to approach this would be most welcome.

  6. ms l.j.

    “It is also a sad state of affairs that the vast majority of buyers of leasehold houses have found that their freeholds have been sold to large institutional ground rent investors and these investors are now asking for hugely inflated sums (£40,000!) to sell them the freehold to their homes. It’s nothing short of scandalous and something we raise in our report.”
    In the case of a detached house, I’ve often wondered whether, if you threatened your freeholder with removal of your house from the land would frighten them into bringing their gound rents down. If not, it might be worth seeking legal advice about actually carrying out your threat.

  7. ChristineChristine

    Hello, we have lived in a leasehold house for 32 years (99 year lease) and have paid a small ground rent yearly (£5). We settled the mortgage some years ago so no longer have one. We have had a lot of upheaval for a few years now and as a result have only just realised we haven’t had an invoice for the ‘ground rent’ since 2014. Can you advise us on what to do. The management of this used to be dealt with via a company called Chesters of Manchester but our last invoice was sent by homes4u (still using the Chesters logo) – we have not had any notification from them at all. Also, can you tell us how we can go about purchasing the freehold if possible. Thanks you for your help.

  8. EvaEva

    I am looking at buying a house which is leashold, it has 138 years left and started at 150. I am thinking of making an offer subject to the cost of renewal of the lease or cost of the freehold (apparently it can only be done after 2 years of living there).
    They said it is peppercorn rent, can this change?
    Can the cost to buy the freehold change after 2 years to what they quote me now? Can it be stated in a contract it remains the same?
    Should I just move on and find something else? I think I will stay 10 years at least (min 5)

    • HomeOwners AllianceHomeOwners Alliance

      Hi Eva, please do consider joining us as a member so that we can give you some advice on your questions.

  9. Allison FosterAllison Foster

    Hi I’m thinking of buying a 3 bed semi with a leasehold of over 900 years. Is this a good idea? And what are the ground rent likely to be ? Im new to all this lol thanks

  10. anthony sammonanthony sammon

    Anthony Sammon
    1 post

    Report post

    Posted 2 minutes ago

    My name is Tony Sammon and I am hoping there is someone out there that maybe able to help me or offer advice on the situation I have now found myself in ?

    My parents purchased a lease hold property some time ago and the ground rent was payed to (Freemont and Home Ground Property Management) which I helped them with via the internet and correspondence through my gmail account. Then my father passed away approximately 2yrs ago and my mother who suffers with Dementia came to live with us. We gained Power of Attorney and began to rent her flat out. My last correspondence with Freemont was via email to which I explained my situation and left them with my contact “Telephone Number” ! They did reply asking to see proof of death and power of attorney I genuinely thought that I had sent this but remember at the time my mother going into hospital for quite a lengthy stay so may have been a costly oversight. This was the last message I received from these sharks until I received a gmail from their solicitors “J B Leitch” stating an outstanding balance of £340 that had incurred legal costs and was now standing at apx £1,400. I was also told in the email that I could not contact Freemont until this sum had been paid. We had a couple of telephone conversations as we just couldn’t get our heads around the fact that they had my email and telephone number and had not tried to contact me. Yet low and behold their solicitor could. Then as by magic the amount increased to £1800. We told them that we were going on holiday and would not be in the country for 10 days to which he said that he would put a hold on the issue for 10 days. We came back to a gmail which now stated we owe £1,915 to be payed in 5 days time. We know we owe ground rent and are not trying to avoid paying this but these legal costs seem to have been deliberately attained by unscrupulous methods. So please…….. if there is anyone out there that could offer us any kind of advice or steer us in a direction of help we would be truly grateful . Should we just bite the bullet and pay ? and does anyone know what the other outcome is Please ?

  11. Christine morrisChristine morris

    Hi, my son is buying my house which is leasehold , there solicitor has told them they will have to pay £349.00 to change the name on the lease, I will be paying the ground rent. This seems very unfair just for them to put a stamp on it. In my lease it states it should be three pounds. I am very stressed ,my solicitor has told me they should just pay the three pounds. Hope you can give me some advise. Thank you

    • Chandni SahniChandni Sahni

      Hello Christine, Thank you for your message. I would probably just follow your solicitor’s advice and the information on your lease and pay the three pounds.

  12. Michael HalpinMichael Halpin

    Excellent free advice, easy for the layman to understand. Really glad we found this article about buying a house with Leasehold Tenure, Saved us a lot of possible heartache and stress.

  13. Trevor ChildsTrevor Childs


    With my assistance, my daughter bought a flat with “onerous ground rent” clauses within the lease.
    She has taken steps to commence proceeding against her conveyancing solicitors for negligence during the conveyancing process for not informing or bringing to her attention, the doubling ground rent clause.
    However, her current advising solicitor in this matter of negligence, has asked for her Report on Title, which has never been forwarded to her.
    I have asked the conveyancing solicitor concerned for this report on Title and they say that there never has been one.
    Is this a statutory document that should have been forwarded to my daughter or is the conveyancing solicitor just fobbing us off?

    Many thanks for your help in this matter, best regards, Trevor Childs.

  14. Michael ConwayMichael Conway


    I bought the leasehold property I live in at the moment. The leasehold was originally started in appximately 1915, for 200 years, there is 95 or so left on the leasehold. I was looking some help on how to buy the freehold and how much it would cost..

    Thank you Michael

  15. P burgessP burgess

    Have been quoted £8.900 to buy our lease on our home 3 bedroomed semi.the. 41years.when left on lease.can I claim some of that price back as the freeholder is the builder and the garden which is on a hill has a retaining wall that’s cracked and leaning over ready to collapse and cause thousands of damage.this wall has been seen by builders and say it should never have been a single wall. P Burgess

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