If you’re a first-time buyer, one of the most important things to know about in advance is the difference between freehold and leasehold properties. This is particularly important if you’re thinking about buying a flat.
This is more likely in London than the rest of the country, as approximately 54.2% of properties in London are flats, according to the London Assembly Research Unit. The average nationwide is only 21.7% according to the most recent Census.
This guide covers the differences between freehold and leasehold properties, plus some advice around what to check about the ownership model before proceeding with a purchase.
Summary: Differences between freehold and leasehold properties
- Freehold: If you buy a freehold property, you usually own it outright, including the building and land it stands on. Most houses in England are freehold.
- Leasehold: If you buy a leasehold property, technically you own it for a fixed period, determined by how long is left on the lease (which you can renew). Most flats in England are leasehold.
- For a block of leasehold flats, a freeholder (also known as the landlord) typically owns the land, building and shared areas. Leaseholds often have to pay ground rent and a service charge.
- The Leasehold and Freehold Reform Act 2024 aims to improve leaseholders’ rights by making it easier to manage, extend or buy the freehold of their property. It is being implemented in stages.
What is a freehold property?
A freehold property is one you own indefinitely, usually including both the building and the land it stands on.
Freehold ownership gives you significant control over your home, but it also means you’re generally responsible for maintaining the property and land.
You may still need to follow planning rules and any restrictions in the title deeds, such as restrictive covenants.
Some freehold homeowners also pay charges to maintain shared spaces on privately managed estates, so freehold ownership doesn’t always mean that there are no ongoing costs.
The vast majority of houses in England are freehold, 92% according to 2024-25 government statistics.
What is a leasehold property?
A leasehold property gives you the right to own and live in a home for a fixed period set out in a legal agreement called a lease. The freeholder, also known as the landlord, owns the land and often the building’s structure or shared areas.
The lease sets out both parties’ rights and responsibilities, including rules about alterations and who pays for repairs. Depending on the lease, you may also have to pay service charges and ground rent.
The lease’s remaining term is very important. As it gets shorter over time, it can affect the property’s value and mortgage options, especially once there are only 80 years left on the lease.
You can extend the lease though and for more details, find out: How much does it cost to extend a lease in the UK?
Most flats in England are leasehold, 92.5% based on the aforementioned government statistics.
Leasehold vs freehold: The differences
Length of ownership
- Freehold: Ownership has no fixed end date.
- Leasehold: Ownership lasts for the remaining term of the lease.
Extent of ownership
- Freehold: You usually own the property and the land it stands on.
- Leasehold: You own the right to occupy the property under the lease. The freeholder owns the land and may own the building’s structure or shared areas.
Ongoing charges
- Freehold: You don’t usually pay ground rent or service charges, but you may pay estate charges for shared spaces.
- Leasehold: You may pay service charges and depending on the lease, ground rent.
Responsibilities
- Freehold: You’re usually responsible for maintaining your property and land.
- Leasehold: Your responsibilities depend on the lease and may include contributing to repairs and upkeep of shared areas.
Rules and restrictions
- Freehold: You may need to follow restrictions in the title deeds, such as restrictive covenants.
- Leasehold: You must follow the terms of the lease, which may set rules on alterations or use of the property.
Property types
- Freehold: Houses are often freehold, though there are exceptions.
- Leasehold: Flats are usually leasehold in England.
What is the Leasehold and Freehold Reform Act 2024 and when will it be implemented?
The Leasehold and Freehold Reform Act 2024 aims to improve leaseholders’ rights in England and Wales, making it easier to manage, extend or buy the freehold of their property.
It received Royal Assent in May 2024 but it is being brought into force in stages. At the time of writing, this is what has taken effect so far:
- From 24 July 2024 onwards: Protections relating to rentcharge arrears, building-safety legal costs and the work of professional insolvency practitioners.
- From 31 October 2024 onwards: Changes to building-safety remediation orders and remediation contribution orders.
- From 31 January 2025 onwards: Removal of the two-year ownership requirement before a leaseholder can make certain lease-extension or enfranchisement claims.
- From 3 March 2025 onwards: changes to the Right to Manage, including raising the non-residential floor-space limit from 25% to 50% and changing who pays some claim costs.
Some of the biggest reforms are not yet in force. These include a new valuation method for lease extensions or freehold purchases, 990-year lease extensions and clearer standardised information about service charges.
There is no confirmed date for full implementation yet. The government has not published a complete timetable and some changes depend on further legislation and secondary regulations.
What is the Commonhold and Leasehold Reform Bill?
The draft Commonhold and Leasehold Reform Bill, proposed in January 2026 under Keir Starmer’s government, aimed to ban leasehold for new flats and cap ground rents at £250.
Commonhold would give flat owners freehold ownership of their properties and collective management responsibility of communal areas through a commonhold association. To learn more, find out: What is commonhold?
Recently, prime minister Andy Burnham committed to introducing a leasehold reform bill to parliament before the end of 2026, but it may have a different title or scope to the January 2026 draft.
What should buyers check on a leasehold property before buying?
Before making an offer on a leasehold property, find out as much as possible about what’s in the lease.
Lease length, ground rent costs and service charges are the three key things to check before committing to the purchase.
Other details may be harder to find out yourself or via the estate agent, but your conveyancer can investigate:
- Lease length: Confirm how many years remain. If in doubt, ask your mortgage lender and conveyancer whether the term could affect borrowing or resale.
- Ground rent: Check how much it is and whether the lease allows it to increase.
- Service charges: Find out what the charge covers and ask about any reserve or sinking fund.
- Planned major works: Check whether repairs or improvement work are planned and whether you could be asked to contribute, for example via a Section 20 notice.
- Management and maintenance: Find out who manages the building and what they maintain.
- Lease restrictions: Check rules on alterations, pets, subletting and use of shared spaces.
- Insurance and repairs: Clarify who arranges building insurance and who is responsible for the structure and communal areas.
What should buyers check on a freehold property before buying?
Important things to check about the freehold, yourself or via a conveyancer, on a property you want to buy include:
- Title register and plan: Check the registered owner, the property’s boundaries and any rights, restrictions or charges affecting it.
- Boundaries and shared features: Clarify responsibility for fences, walls, trees and shared driveways.
- Restrictive covenants: Any rules that could limit alterations or how you use the property.
- Estate charges: Find out whether you’ll contribute towards shared roads, gardens, lighting or other communal facilities.
- Property alterations: Ask about any alterations that may need approval or be subject to building regulations.
FAQs
Can a house be leasehold in the UK?
Yes. Although most houses are freehold, approximately 8% are leasehold according to government figures.
Do freeholders pay service charges?
Freeholders don’t usually pay leasehold service charges, but for properties on private estates they may need to pay charges towards shared areas such as roads, gardens or lighting.
What does owning a share of a freehold mean?
You own a lease for your individual flat and also share ownership of the building’s freehold, usually with the other flat owners. For more details, find out: What does share of freehold mean?
What is a flying freehold?
This is where part of a freehold property extends over or under land owned by someone else, such as a room above a shared passageway. To learn more, read this: What is a flying freehold?
Final thoughts
If you found this article useful, you may also find some of our other articles helpful. Some of the most popular Fine Living guides include:
When an estate agent is showing you a property, be ready to ask them lots of questions, particularly if it’s a leasehold flat. They should be able to tell you how many years are left on the lease, for example.
If you’re looking to buy, take a look at the houses and flats in the Fine Living portfolio and if you have any queries, please don’t hesitate to get in touch.
Want to discuss the advice on this blog – or anything else?
