When you’re buying a home, one of the first legal questions is whether the property is freehold or leasehold. It’s a distinction that affects what you own, what you pay on top of your mortgage, how much say you have over the property, and how straightforward it will be to sell. Whether you’re a buyer, seller, or landlord, understanding the two helps you make a confident, well-informed decision.
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What is freehold ownership?
Freehold is the most complete form of property ownership. You own both the building and the land it stands on, outright and with no time limit, with no landlord, no ground rent, and no lease counting down. You’re responsible for maintaining the whole property, inside and out, but you’re free to make changes within the usual planning and building regulations. The overwhelming majority of houses in England and Wales are freehold.
What is leasehold ownership?
With leasehold, you own the property for a fixed number of years, as set out in your lease, but not the land it sits on. The land and usually the building’s structure remain owned by the freeholder, and when the lease runs out ownership returns to them unless you’ve extended it. This is why lease length matters: a property’s value and mortgageability can fall as the years remaining reduce.
Leases are typically granted for 99, 125, or 999 years, so there’s usually plenty of time remaining. Most flats are sold as leasehold, as it’s a practical way to manage shared spaces in a building with several homes. You may also come across share of freehold, where leaseholders jointly own the freehold and share control, and commonhold, which lets flat owners own their homes outright while jointly managing shared parts.
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How freehold and leasehold differ in practice
The differences play out across costs, maintenance, and what you’re allowed to do with your home.
Costs
With freehold, there are generally no tenure-related costs beyond buildings insurance and the maintenance you choose to carry out. A leasehold property can carry ground rent (though on most new residential leases since June 2022, this is limited to a peppercorn, meaning effectively nothing), service charges towards shared areas such as hallways, lifts, and gardens, and occasional contributions towards major works.
Maintenance
As a freeholder, you maintain the entire property yourself, which means more responsibility but complete control. As a leaseholder, you look after the inside of your home, while the building’s structure and shared areas are maintained by the freeholder or managing agent and paid for through the service charge.
Rights and restrictions
A freeholder has broad freedom to alter, extend, or improve the property, subject to planning permission and building regulations. A leaseholder may need the freeholder’s consent for major alterations, and the lease can set out rules about pets or subletting, so it’s always worth reading it carefully. Recent reforms have strengthened leaseholders’ rights: the Leasehold and Freehold Reform Act 2024 has made it cheaper and simpler to extend a lease or buy the freehold, improved service charge transparency, and made it easier to take over the management of a building.
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Selling a freehold vs leasehold property
A freehold property is generally simpler to sell, as there’s no lease information for a buyer’s solicitor to review. A leasehold property is very much sellable too, with millions changing hands smoothly every year, but buyers and their lenders will look closely at the remaining lease term, ground rent, and service charge, so having these details ready helps. A short lease can slow things down, so if yours is getting shorter, take advice early.
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Can you convert leasehold to freehold?
Yes, in many cases you can, through a legal process known as leasehold enfranchisement. For a leasehold house, you may have the right to buy the freehold individually under the Leasehold Reform Act 1967. For a flat, the process is collective enfranchisement, where the leaseholders club together to buy the freehold, with at least half of the flats taking part. In both cases the property is valued, notice is served on the freeholder, and the price is negotiated, with the First-tier Tribunal available to settle any disagreement.
The alternative is to extend your lease, which adds years to the term and reduces ground rent to a peppercorn, though you remain a leaseholder. Both routes involve legal and valuation work, so it’s wise to speak to a specialist solicitor and surveyor.
Common misconceptions
“Leasehold means you’re only renting.”
Not true. As a leaseholder you own your home for the term of the lease. It’s a form of ownership, not a tenancy.
“All leasehold properties have expensive ground rent.”
No. On most new residential leases, ground rent is limited to a peppercorn, and many older leases have modest ground rents too.
“A short lease doesn’t matter.”
It does. As a lease gets shorter, it can affect the property’s value and how easily it can be mortgaged, so the remaining term is always worth checking.
Getting the right advice
Understanding the difference between freehold and leasehold helps you buy, sell, or let with confidence, knowing exactly what you’re taking on. Neither tenure is inherently better; they suit different properties and circumstances, and what matters most is going in informed.
Our local teams know their markets and follow The Property Ombudsman Code of Practice, so you’ll always get honest, straightforward advice. Find your local Martin & Co branch to speak with a team who can help.
