When you're looking at properties, you'll see them described as either 'freehold' or 'leasehold'. The difference is straightforward but important.
With a freehold property, you own both the building and the land it sits on outright. There's no time limit on your ownership and you have full control over what you do with it.
With a leasehold property, you own the property for a fixed term but not the land underneath. The building and land are owned by a freeholder (the landlord), and there may be restrictions on what you can do with the property.
Most houses are freehold. Most flats are leasehold - and that's completely normal, not something to worry about.
What is a freehold property?
When you buy a freehold property, you own it outright with no landlord involved. You own both the building and the land it stands on, and there's no time limit on that ownership.
This means you have full control over what you do with the property, subject to planning permission and building regulations. All maintenance and repairs are your responsibility, both inside and out.
The vast majority of houses in the UK are freehold, whether detached, semi-detached, terraced or bungalows. Freehold properties generally have higher asking prices than leasehold because you're buying the land as well as the building.
You might occasionally see "flying freehold" mentioned. This is an unusual situation where part of a freehold property sits over or under a neighbour's property - like a room above a shared passageway or a cellar extending under next door's garden. It's worth knowing about but doesn't change the fact that the property is freehold.
For most buyers, if you're looking at houses rather than flats, you'll be looking at freehold properties.
What is a leasehold property?
Most flats and apartments in the UK are leasehold. The government banned new leasehold houses in 2024, so now almost all leasehold properties are flats.
When you buy a leasehold property, you own it for a fixed term set out in the lease, but you don't own the land the building sits on. The freeholder (the landlord) owns the building and land, and you have a lease agreement giving you the right to live there for that fixed period.
Lease lengths and why they matter
Leases typically run for 99 to 999 years. The length of the remaining lease is important because it affects both the property's value and your ability to get a mortgage.
Most mortgage lenders won't lend on properties with less than 80 years remaining on the lease. Below this threshold, the property loses value faster and becomes harder to sell. That's because once a lease drops below 80 years, extending it becomes more expensive due to something called "marriage value" - though recent reforms have now abolished this (more on that below).
The good news is that leaseholders have the legal right to extend their lease, which we'll cover in the reforms section.
Costs you'll pay as a leaseholder
As a leaseholder, you'll typically pay:
Ground rent: This is an annual charge to the freeholder for the land your building sits on. Since June 2022, ground rent on new leases has been set at zero (often called "peppercorn rent"). If you're buying an older leasehold property, check what the ground rent is and whether it increases over time.
Service charges: These cover the maintenance and repair of communal areas - things like the entrance hall, lifts, gardens and the building's exterior. Service charges vary hugely depending on the building and what's included. Get clear figures on what you'll pay annually and what's covered.
Buildings insurance: The freeholder usually arranges this and you'll pay your share through the service charge.
Restrictions in your lease
Your lease will include rules about what you can and can't do with the property. Common restrictions include:
- Keeping pets
- Subletting (renting out a room to someone else)
- Making structural alterations
- Running a business from the property
Your solicitor will get the full lease document during conveyancing so you can review all restrictions before you commit to buying.
Your rights as a leaseholder
Even though you don't own the freehold, you have legal rights:
- The freeholder must maintain the building properly
- You can extend your lease when you need to
- You may be able to buy the freehold (either individually or collectively with other leaseholders)
Most flats are leasehold for practical reasons. When you have multiple properties in one building, having a freeholder to manage the overall structure and communal areas makes maintenance simpler and keeps the building in good condition.
Many new build flats are leasehold for the same reason - the developer retains the freehold to manage the building and communal areas.
There's a third option you might come across: share of freehold.
This is where the leaseholders in a building collectively own the freehold company, rather than having an external landlord. Each leaseholder still owns a lease on their individual flat, but together they control the freehold.
Share of freehold gives you more control over the building's management, makes it easier to extend leases or carry out major works, and means you have a direct say in how service charges are spent.
It's most common in smaller buildings, particularly converted houses that have been split into flats. If you're buying into a share of freehold arrangement, there'll be some additional conveyancing work involved.
Freehold vs leasehold: what should buyers know?
If you're buying a flat, it'll almost certainly be leasehold. If you're buying a house, it should be freehold (new leasehold houses were banned in 2024). So for most buyers, the choice is really about whether a house or flat better suits your needs and budget.
From a conveyancing perspective, the process is similar for both types of property, with a few additional checks needed for leasehold purchases.
Checking a leasehold property
If you're buying leasehold, here's what to look at carefully:
Years remaining on the lease
Ideally you want 90+ years remaining. The absolute minimum is 80 years - below this, most lenders won't offer a mortgage and the property loses value faster. Your solicitor will check this and flag any concerns.
Annual costs
Find out exactly what you'll pay in ground rent and service charges. Ask the estate agent for the figures and what the service charge covers. If it seems high, ask why.
Restrictions in the lease
Check whether the lease has rules that would affect how you want to live. Common restrictions cover pets, subletting and alterations. Your solicitor will review the full lease and highlight anything unusual.
Ground rent clauses
These are rare now, but older leases sometimes include escalating ground rent that increases dramatically over time (doubling every 10 years, for example). Your solicitor will spot these.
Why leasehold works for many buyers
Leasehold properties - usually flats - offer some real advantages:
- More affordable entry point than houses
- Access to areas where houses would be out of budget
- Less maintenance responsibility (building exterior, communal areas handled by freeholder)
- Often includes benefits like secure entry systems, communal gardens or gyms
Shared ownership schemes are also typically leasehold, offering another route onto the property ladder with a lower deposit.
When to be cautious
Walk away if:
- The lease has under 80 years remaining (unless you're prepared to extend it immediately)
- Service charges are very high or unclear
- The lease has unreasonable restrictions you can't live with
None of these are reasons to avoid leasehold properties entirely - just things to check carefully with your solicitor before committing.
Leasehold reforms 2024-2025
The Leasehold and Freehold Reform Act 2024 introduced several changes that now make leasehold ownership fairer:
Extending your lease or buying the freehold
You no longer have to wait two years before you can extend your lease or buy the freehold. You can do this immediately after purchase if needed.
Longer lease extensions
When you extend a lease, you can now add 990 years at a peppercorn (zero) rent. Previously, extensions were for shorter periods and often included ongoing ground rent.
Marriage value abolished
This complicated calculation that made lease extensions expensive on properties under 80 years has been scrapped, making extensions cheaper.
No new leasehold houses
From 2024, new houses can't be sold as leasehold in England and Wales. This mainly affects new build properties.
The government's stated long-term goal is to phase out leasehold entirely, though this will take years to implement.
These reforms make leasehold a more secure form of property ownership, particularly for buyers who need to extend short leases.
Getting conveyancing support
Whether you're buying a freehold house or a leasehold flat, the conveyancing work involved is similar with a few additional checks needed for leasehold purchases (reviewing the lease terms, checking ground rent and service charges, confirming the remaining lease length).
What matters most is having a solicitor who'll review the lease terms carefully, flag any concerns and explain your options clearly.
Homeward Legal conveyancing services includes thorough lease reviews on all leasehold purchases, with no completion, no fee protection if your purchase doesn't go through.
Get a quick online quote or call us on to discuss your purchase.
Frequently asked questions about freehold and leasehold properties
Can first time buyers get mortgages on leasehold properties?
Yes, first time buyers can get mortgages on leasehold properties as long as the lease has at least 80 years remaining (some lenders require 90+). If the lease is shorter, you'll need to arrange an extension before or after purchase. Leasehold flats are often more affordable than freehold houses, making them popular with first time buyers.
What's a safe lease length to buy?
Aim for at least 90 years remaining. The absolute minimum is 80 years - below this, most lenders won't offer mortgages and the property loses value faster. If you're looking at 70-80 years, factor in the cost of extending the lease soon after purchase.
Should I avoid leasehold properties?
No. Most flats are leasehold and they're a good investment when bought carefully. Check the lease has 80+ years remaining (ideally 90+), service charges are reasonable and there are no restrictive clauses you can't live with. Your solicitor will review the full lease and flag any concerns.
What happens when a lease runs out?
When a lease expires, ownership reverts to the freeholder. However, this rarely happens because leaseholders have the legal right to extend their lease long before expiry. Since 2024, you can extend by 990 years at zero ground rent, and you can do this immediately after purchase.
Can I extend my lease as a first time buyer?
Yes. Since the 2024 reforms, you can extend immediately after purchase rather than waiting two years. The extension adds 990 years at zero ground rent. Costs vary depending on property value and remaining lease length. Your solicitor can arrange the extension and explain costs.
Are leasehold houses common?
No. The government banned new leasehold houses in 2024, so all new builds must be freehold. You might find older leasehold houses on the market, but they're rare. Most flats remain leasehold for practical reasons - it's simpler to manage communal areas when there's a freeholder.