Leasehold vs Freehold Explained, What Every Property Buyer Needs to Know

What is Freehold?

When you buy a freehold property, you own the building and the land it stands on outright. There is no time limit on your ownership. The vast majority of houses in England and Wales are sold freehold.

With a freehold property, you are responsible for all maintenance and can make changes to the building (subject to planning permission and building regulations). You do not pay ground rent or service charges, though estate management fees may apply on some new-build estates.

What is Leasehold?

A leasehold property means you own the right to occupy the building for a fixed number of years as set out in the lease, but you do not own the land. The land (and sometimes the building structure) is owned by the freeholder, also called the landlord.

Most flats in England and Wales are sold leasehold. Some houses, particularly new builds, have also been sold leasehold, though this practice has been widely criticised and the Leasehold and Freehold Reform Act 2024 has introduced significant restrictions.

Key Differences

Why Lease Length Matters

If you are buying a leasehold property, the remaining lease term is critical. Mortgage lenders typically require at least 70–85 years remaining at the end of the mortgage term. Properties with fewer than 80 years remaining on the lease become significantly harder to sell and refinance.

The cost of extending a lease increases as the term falls below 80 years. Once a lease falls below 80 years, the freeholder becomes entitled to a share of the property's "marriage value", the additional value created by the extension, which substantially increases the cost.

How to Check Tenure on Property Passport UK

Every property on Property Passport UK shows its tenure type (freehold or leasehold) sourced directly from HM Land Registry title data. For leasehold properties, where available, the original lease term is also displayed.

You can search any property by postcode to view its tenure status before making an offer or instructing a solicitor.

The Leasehold and Freehold Reform Act 2024

The Leasehold and Freehold Reform Act 2024 made significant changes to leasehold law in England and Wales, including:

• Abolishing ground rents for most new residential leases
• Making it easier and cheaper for leaseholders to extend their lease
• Giving leaseholders greater rights to manage their building
• Restricting the sale of new leasehold houses (with limited exceptions)

The reforms are being phased in. Leaseholders should check with their solicitor regarding which provisions apply to their specific property.