What is freehold and leasehold?

Freehold and leasehold are two different forms of home ownership.

Whether your property is leasehold or freehold makes a big difference to what you can do to, and in, your home. 

It’ll also determine if there are extra costs to pay for your home.

What is freehold?

When you’re a freeholder it means you own your home as well as the land it stands on

There’s no time limit on how long you own a freehold.

The property is “free from hold” from anyone else except you, the owner.

What is leasehold?

When you’re a leaseholder it means you own your home for as long as is agreed in your lease agreement with the freeholder (or landlord) of your home.

The freeholder will own the land your property stands on and has certain powers over it.

Freehold vs. leasehold


Freehold is usually the preferred option when you buy a house as it means you own the building and land it’s on for as long as you like. 

If you own a freehold house, you can pretty much do what you like to it, subject to the law.

Because there’s no lease, you won’t have to pay ground rent, worry about the lease expiring or be bound to a freeholder’s rules.

If you own a freehold property it’s your responsibility to maintain the building.


Leases normally start at 99, 125 or 999 years. 

When the time on a lease falls to zero, ownership of the property goes back to the freeholder.

The leaseholder’s rights and responsibilities, and those of the freeholder, will be set out in the lease. 

Leases differ from building to building.

The lease will say what you can, and can’t do, in your property. 

For example, some leases don’t allow you to:

  • sublet the property

  • keep pets

  • install a satellite dish on your wall

Most leasehold properties are flats. But some houses are sold as leasehold too.


If you’re a leaseholder you'll pay: 

  • an annual ground rent for the land the building sits on

  • service charges for the upkeep of the communal parts of the property like the roof, stairwell and garden

The freeholder decides how much you’ll pay.

Ground rent and service charges can be significant extra costs if you’re a leaseholder, particularly on new build flats with large communal spaces.

If you don’t pay ground rent or service charges your lease could be terminated. If this happens the ownership of your home will go back to your freeholder.

It can be more difficult to get a mortgage if there are less than 70 years on your property’s lease.

Share of freehold flats

If you own a share of freehold home you’re still a leaseholder, but you’ll also own a share of the freehold property.

You’ll have more control over your building and be responsible for more of the cost of repairs and maintenance.

There are a couple of ways a share of freehold can work:

  • The freehold is shared between a group of flat owners in the same building. Together they own the freehold and their names will appear on the deeds.

  • A company owns the freehold and each tenant owns a share of that company.

In both cases you’ll still be a leaseholder, but you’ll also own a part of the freehold.

Is my house freehold or leasehold?

The deeds to your home will say whether your home is freehold or leasehold.

Most houses are freehold, but the past decade has seen some developers sell thousands of new build houses as leasehold.

You can also carry out a freehold or leasehold check with the Land Registry.

Make sure you know what it means to own a leasehold

Many buyers have complained that they weren’t properly told about what it means to own a leasehold during the sales process.

For example, owners of leasehold houses will have to pay the freeholder annual ground rent. 

Some leases allow for the ground rent to be doubled later on. This can make an initially affordable ground rent potentially unaffordable in the future.

Another issue is that some developers told buyers they could buy the freehold to their home later on, but then sold the freehold to another company.

The government plans to ban new build houses being sold as leasehold, except in some cases.

Buying the freehold of a house

If you own a leasehold you can ask the freeholder to sell you the freehold.

Your legal rights to do this are set out in the 1993 Leasehold Reform Act.¹ This explains the formal process for buying your freehold.

Going through the formal process gives you more protection than coming to an “informal” agreement with your landlord or freeholder.

Leasehold houses

If you own a leasehold house you can buy the freehold of your home using a process called enfranchisement.

To do this you’ll need:

  • a solicitor with experience in buying the freehold of houses

  • a surveyor who specialises in enfranchisement of houses

Your surveyor will calculate a valuation for buying the freehold of the leasehold house. 

The calculation will take into account:

  • the number of years remaining on the lease

  • the property’s value – with and without the freehold

  • the annual ground rent

Your surveyor will then negotiate a price with the freeholder. 

If an agreement can’t be reached, you can take your case to the First Tier Tribunal.

Leasehold flats

If you own a leasehold flat you can join together with other leaseholders in your block to buy the freehold to your building. This is called collective enfranchisement.

At least half of the flats in a block need to be involved for collective enfranchisement to go ahead.

Collectively owning the freehold will give you more control over how the building is run. It’ll also add value to each flat.

Right to manage

Under the Commonhold and Leasehold Reform Act 2002, most leaseholders can also apply with other leaseholders for the “right to manage” their building.²

Right to manage gives you more control over service charges and maintenance work. 

However, you’ll still have a lease and a freeholder.

Extending the lease

Individual flat owners also have the option to extend their lease. This will:

  • increase the value of the flat

  • reduce the ground rent payable to zero

  • make the flat easier to sell or mortgage

You can extend a lease on your own, so you don’t need to join forces with your neighbours.

It’s best to extend a lease using the formal process set out in the 1993 Act. 

Doing it this way will extend your lease by 90 years and reduce your ground rent to zero. 

You’ll have to pay the freeholder to extend your lease. How much you pay depends on:

  • the number of years remaining on the lease

  • the property’s value (with and without the lease extension)

  • the annual ground rent

You’ll need both a specialist surveyor and a solicitor experienced in lease extensions to extend your lease. 

You’ll also need to pay your freeholder’s costs.

Your freeholder may offer you an “informal” lease extension. Accepting this will mean you’re not protected by the 1993 Act, so it’s rarely a good idea.

What is a commonhold?

Commonhold ownership gives each flat owner:

  • freehold ownership of their home

  • joint ownership of communal areas

Commonhold was introduced in 2004 as an alternative to leasehold ownership of flats.

A commonhold association, made up of residents, manages the building. 

Management is democratic, with each owner having a vote when decisions need to be made.

However, commonhold hasn't really taken off. Less than 20 commonhold developments have been built since its introduction.³

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¹ Leasehold Reform, Housing and Urban Development Act 1993

² Commonhold and Leasehold Reform Act 2002

³ The Law Society Gazette: Commonhold 'must earn market approval' to be viable leasehold alternative