Leasehold vs Freehold: What are the different types of home ownership?


If you want to purchase a property in the UK, you should be aware that there are two main types of home ownership – leasehold and freehold.

Buyers should consider the advantages and disadvantages of either type before making an offer, as their decision may ultimately affect the price or indeed the value of an apartment or house if it is sold in the future.

There are other factors to think about too. The potential for ongoing costs in the form of ground rent and maintenance fees as a leaseholder must also be taken into account.

What is a leasehold property?

As a leaseholder you effectively ‘lease’ a home from the freeholder for a number of years. It is the freeholder who owns the land your property is built on. Leasehold is the most common type of ownership for flats, although it can also be the way shared ownership schemes and some new-build developments are set up too.  

The length of time offered on a lease varies – from as much as 999 years to as little as 40 years. When buying a property which is being sold on a leasehold basis, you should always check how long is left to run. Consult with a professional if you are unsure.

Meanwhile, the freeholder is usually responsible for maintaining common areas such as hallways, as well as the external walls or roof (although leaseholders may assert their “right to manage” communal areas).

Leaseholders may also have to pay:

  • Ground rent
  • Maintenance fees
  • A share of buildings insurance
  • Other service charges

 Leasehold vs Freehold

If you buy a freehold property, then you own the building and the land it stands on, until the moment you sell it. It is the most common type of ownership offered on standalone houses, although the terms of a sale should always be checked.

Because you are the owner, there is no ground rent to pay or maintenance charges to budget for. In fact, fees are a frequent cause of contention between leaseholders and freeholders, particularly if these increase and if leaseholders feel they are not getting value for money when it comes to keeping up maintenance standards.    

If you are a leaseholder, it is possible to extend your lease or even buy it and become the freeholder. However, this can be complicated and costly, so it is always best to seek legal advice before starting the process.

Help is available when you need it

For any information and advice on conveyancing please contact Anthony Stockton Solicitors by using our contact form or call us for a free quotation on 0330 055 3737.