Do you know the difference between Freehold and Leasehold? Does it matter?

What is freehold?

If you own the freehold, it means that you own the building and the land it stands on. A freehold estate in land (as opposed to a leasehold) is where the owner of the land has no time limit to his period of ownership. You won’t have to pay annual ground rent.

By owning the freehold of a property, you have the sole responsibility for maintaining the fabric of the building – the roof and the outside walls.

Houses are generally sold as freehold. However, please note flying-freeholds.

Service charges are not generally payable with freehold properties. However, take note that developers are now requiring owners of new build properties to contribute towards the maintenance of shared driveways and communal/estate landscaping. Check before you buy.

Generally, the only ways in which you can lose a freehold property is either by repossession by your lender due to non-payment of your mortgage or compulsory purchase.

 What is leasehold?

Leasehold means that you own a property (usually a flat) for a fixed term but not the land in which it stands on.  There is an agreement between you the Leaseholder and the Freeholder, the party who owns the land in which the entire block is situated. This document is a called the ‘Lease’.

The lease is usually long term, often 99 years, sometimes as high as 999 years. The lease also sets down the legal rights and responsibilities of either side.

Possession of the property will be subject to the payment of an annual ground rent. In addition to ground rent leaseholders will usually also pay service charges and their share of the buildings insurance.

The Freeholder will normally be responsible for maintaining the common parts of the building, such as the entrance hall and staircase, as well as the exterior walls and roof. However, other leaseholders might have claimed their “right to manage”, in which case it is their responsibility.

When the lease expires, ownership of the property reverts back to the freeholder.

A major consideration is, if you as leaseholder do not fulfil the terms of the lease; for example, by not paying the ground rent/service charges or breached a term of the lease then the lease can be forfeited, and you will have to give up possession of your property.

Taking the above into account, Freehold is generally the preferred option.

If you would like further information in respect of the above, please do not hesitate to contact one of our friendly team on 01279 466910 or send us an email to

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