Guide to Buying Freehold vs Leasehold Property
When buying a property in the UK, one of the first and most important decisions you’ll need to make is choosing between freehold vs leasehold ownership. These two types of property ownership come with very different rights, responsibilities, and long-term implications—so it’s essential to understand what each one means before you commit.
In this easy-to-follow guide, we’ll break down the key differences between freehold and leasehold, what they mean for you as a buyer, and how they can affect your mortgage options, ongoing costs, and legal rights as a homeowner.
What is a Freehold Property?
A freehold property means you own the building and the land it stands on outright, with no time limit on your ownership. Most houses in the UK are sold as freehold, which gives you complete control and long-term stability.
Advantages of Buying a Freehold Property
- ✅ You own the property and land permanently
- ✅ No ground rent or service charges to pay
- ✅ You can renovate, extend, or modify the property without landlord permission (subject to planning rules)
- ✅ No lease to worry about or renew
Things to Consider with Freehold Ownership
- 🔧 You’re responsible for all maintenance and repairs
- 💷 Costs can be higher upfront compared to leasehold homes
What is a Leasehold Property?
A leasehold property means you own the property for a set period — typically 99 to 125 years — but not the land it stands on. Once the lease ends, ownership returns to the freeholder (also known as the landlord), unless you extend the lease or buy the freehold.
This type of ownership is most common for flats, though some new-build houses may also be sold as leasehold.
Key Features of Leasehold Properties
- ⏳ You own the property for a fixed number of years
- 💸 You must pay ground rent, service charges, and possibly admin fees
- 🧱 The freeholder owns and maintains shared areas and the building structure
- 🛠 You may need permission to make structural changes
Pros of Buying Leasehold
- ✅ Fewer responsibilities for external repairs
- ✅ Potentially more affordable than freehold properties
- ✅ Option to extend the lease or purchase the freehold later
Cons of Leasehold Ownership
- ❌ Lease extensions can be expensive
- ❌ Service charges and ground rent can be high
- ❌ Lease length can affect your mortgage options and resale value
Leasehold vs Freehold – What’s the Difference?
| Feature | Freehold | Leasehold |
|---|---|---|
| Ownership Duration | Unlimited | Fixed term (e.g. 99 or 125 years) |
| Land Ownership | Yes | No |
| Ground Rent | No | Yes |
| Service Charges | No (unless private estate fees) | Yes (can be substantial) |
| Property Modifications | Full control | Restricted – need landlord consent |
| Responsibility for Repairs | Owner | Shared or landlord responsibility |
Buying a Leasehold House – What You Need to Know
While leasehold houses are less common, they do exist — especially in new-build developments. Always ask the following before buying:
- Do I own the garden or driveway?
- What are the ground rent and service charges?
- Can I make changes to the property?
- What restrictions are in the lease?
Leasehold houses may appear cheaper upfront, but additional ongoing costs and restrictions can make them more complex in the long run. In fact, some mortgage lenders are cautious about leasehold houses due to rising leasehold-related expenses.
Can You Buy the Freehold of a Leasehold House?
Yes, in many cases you can buy the freehold of your house if:
- You’ve owned the leasehold for at least two years
- The property qualifies under the Leasehold Reform Act
If your home is shared ownership, you can staircase up to 100% ownership and then apply to purchase the freehold. However, your landlord is not obligated to sell unless required by law.
Understanding Leasehold Flats
With leasehold flats, you only own the interior of your flat, not the building’s structure or communal areas. These shared areas (hallways, roof, garden, etc.) are the responsibility of the freeholder, and you’ll contribute via service charges.
As a leaseholder, you can still decorate internally (e.g. paint, replace carpets), but always check your lease terms for any restrictions.
Buying the Freehold of a Leasehold Flat
Buying the freehold of a flat is more complicated, as you typically share the building with other leaseholders. The most common route is via collective enfranchisement, where a group of flat owners join together to buy the freehold.
Requirements include:
- At least 50% of the leaseholders must agree
- Each must meet certain ownership criteria
Once completed, you’ll become a shared freeholder, giving you greater control over management and costs.
Leasehold Mortgages vs Freehold Mortgages
Both freehold and leasehold properties are mortgageable, but leasehold mortgages come with extra considerations. Lenders often require:
- A minimum lease term (usually 80 years or more)
- Clarity on ground rent and service charge terms
- Confirmation of lease conditions
If the lease is under 80 years, you may need to extend it before you can get a mortgage, which can be costly. Always check the remaining lease term before making an offer.
How to Check Who Owns the Freehold
Before buying a leasehold property, it’s essential to know who the freeholder is. You can find this information by checking the Land Registry, which shows:
- Name of the freeholder
- Contact details
- Length of the lease
- Any legal restrictions or notices
Thinking of Buying Leasehold or Freehold? We Can Help.
Deciding between freehold vs leasehold property ownership isn’t always straightforward. At Orchard Mortgage Solutions, our expert advisers will assess your personal circumstances and help you choose the most suitable property type and mortgage option.
Whether you’re buying a flat, house, or exploring how to buy your freehold, we’re here to guide you every step of the way.
Contact us today for personalised advice on leasehold and freehold mortgages.
📞 Call us today 01257 543013 to speak with one of our expert advisers
📧 Or use our contact form to arrange a no-obligation consultation
