Freehold means you own the property and the land it sits on outright, indefinitely. Leasehold means you own the right to occupy the property for a fixed number of years, while a separate freeholder owns the underlying land and building structure.

Where each is typically used

Most houses in England and Wales are sold freehold. Most flats are sold leasehold, because someone needs to own and manage the shared structure and communal areas — the building's freeholder, sometimes via a managing agent.

Key question for any leasehold purchase: how many years are left on the lease? Lenders and future buyers can be cautious about leases with fewer than roughly 80 years remaining.

What leasehold ownership usually involves

  • Paying ground rent to the freeholder (increasingly being phased out on new leases)
  • Paying service charges toward maintenance of shared areas and the building structure
  • Needing the freeholder's consent for certain changes to the property
  • The right, in many cases, to extend the lease or collectively buy the freehold with other leaseholders

What is "Share of Freehold"?

Some flats are sold with a share of the freehold, meaning the leaseholders collectively also own the freehold, usually through a company. This can offer more control over management and costs than a leasehold with an unconnected third-party freeholder.

Can I extend a short lease?

Often yes, and many leaseholders have a statutory right to do so after meeting certain conditions — though it can be costly, and the cost typically rises the shorter the remaining lease becomes.

This guide is for general information only and does not constitute legal advice. Leasehold reform is an active area of law — always check the current position with your solicitor.