Freehold vs Leasehold: What’s the Difference? (2026 Guide)
With a freehold property, you own the building and the land it sits on outright, with no time limit. With a leasehold property, you own the right to live in it for a fixed number of years under a lease, but the building and land belong to the freeholder. Most houses are freehold; most flats are leasehold.
Written by Josh Robinson, Content Writer at We Buy Any House.
If you’re buying a home in the UK, you’ll see properties listed as either freehold or leasehold. Knowing the difference matters, because it affects what you actually own, what you’ll pay each month, how easy the property is to mortgage, and how easy it will be to sell later. (For the bigger picture, see our step-by-step guide to the house buying process.)
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Freehold vs leasehold at a glance
| Freehold | Leasehold | |
|---|---|---|
| What you own | The building and the land, indefinitely | The property for the length of the lease only |
| Typical property type | Houses | Flats and maisonettes |
| Who maintains the building | You | The freeholder (you pay via a service charge) |
| Ongoing charges | None beyond your own upkeep | Service charge, sometimes ground rent, admin fees, buildings insurance |
| Time limit | None | Fixed term (often 99–999 years originally) |
| Main risk | Full responsibility for all repairs | A shortening lease can hit value and mortgageability |
What is a freehold property?
The freeholder owns the property outright, including the land it’s built on, with no end date. As the owner, you’re responsible for maintaining the building and the grounds, so factor those costs into your budget when buying.
Most houses are sold freehold. The main exception is properties on specific schemes, such as shared ownership, which can be leasehold.
What is a leasehold property?
With a leasehold property, you own the home for the length of the lease agreement with the freeholder. When the lease ends, ownership reverts to the freeholder — though in practice, most leaseholders extend the lease well before that point. Flats and maisonettes are usually leasehold: you own the property inside the building, but not the building itself or the land.
When you buy a leasehold home, you take over the existing lease from the previous owner. Before you commit, check:
- How many years are left on the lease?
- What are the service charges and any other recurring costs?
- Is there ground rent, and how much?
- If the lease is short, could it affect resale value or your mortgage?
Share of freehold
You can also own a share of freehold. If you own a flat in a block, you and the other leaseholders can club together to buy the freehold between you. This is called collective enfranchisement, and it gives you far more control over the building and lets you extend your lease on your own terms.
At least half of the qualifying leaseholders in the building need to take part. To start the process you serve a formal Section 13 notice on the freeholder. It can be costly, so it’s common to set up a management company together — or appoint a managing agent — to run the building afterwards.
Commonhold: the alternative to leasehold
Commonhold is a third form of ownership that the government is actively trying to revive as a replacement for leasehold flats. Under commonhold, you own your flat outright (like a freehold) and jointly own and manage the shared parts of the building through a commonhold association, with no lease and no third-party freeholder. It’s still rare in practice, but it’s worth knowing about, as policy is moving in this direction.
Typical costs of a leasehold property
Because you don’t own the land, the freeholder is responsible for running and maintaining the building. Leaseholders usually cover this through a service charge, which typically pays for things like:
- Maintaining communal gardens
- Electricity for communal areas
- Repairs and maintenance of the exterior and structure
You may also pay ground rent, admin fees, or a contribution to buildings insurance. Get clarity on every charge before you buy, as they affect what you can realistically afford alongside your mortgage.
Ground rent note: Following the Leasehold Reform (Ground Rent) Act 2022, most new long residential leases can only charge a “peppercorn” (effectively zero) ground rent. Older leases may still carry ground rent, and reforms are underway to cap or reduce these — so check what applies to the specific lease you’re buying.
Why lease length matters
The number of years left on a lease has a big impact on value and on your ability to get a mortgage:
- Once a lease drops below around 80 years, extending it becomes significantly more expensive (historically because of an extra cost called “marriage value”) and the property starts to lose value.
- Many lenders are wary of short leases and will want a comfortable margin of years remaining beyond the end of the mortgage term. A lease under roughly 70–80 years can make a property harder to mortgage — and therefore harder to sell on.
If you’re looking at a short-lease property, treat the cost of extending as part of the purchase price.
How to extend a lease
If you’re a qualifying leaseholder, you can apply to extend your lease by serving a Section 42 notice on the freeholder. The freeholder charges for the extension, and the amount varies with the length of the extension and the size and type of property. (Our full guide to extending a lease walks through the costs and the process step by step.)
Important — the law is changing: The Leasehold and Freehold Reform Act 2024 introduced reforms aimed at making lease extensions cheaper and simpler — including longer standard extension terms, abolishing “marriage value,” and removing the previous rule that you had to have owned the property for two years before extending. Some of these provisions are being brought in through later legislation and have been phased in over time, so check the current position before relying on any specific rule. If in doubt, speak to a solicitor who specialises in leasehold.
Your rights as a leaseholder
You have the right to make sure your landlord isn’t overcharging you for the upkeep of the building. If you think the service charge is unreasonable, you can ask for:
- A summary of how the service charge has been spent
- The calculations behind it
- Receipts for any work that’s been carried out
Your landlord must also consult you before:
- Any work that will cost any single leaseholder more than £250 through the service charge
- Any long-term agreement that will cost a leaseholder more than £100 a year
What if you’re unhappy with how the building is managed?
You have two main options:
- Right to Manage (RTM). This lets leaseholders take over management responsibilities from the landlord. You don’t have to prove the current landlord is doing a bad job, but you do need to set up an RTM company with other leaseholders.
- Appoint a new manager. Here you do need to show the current management is poor — for example, evidence of unfair costs or breaches of the lease.
Freehold vs leasehold: which should you buy?
There’s no single right answer — it depends on the property and your plans:
- Freehold suits buyers who want full control and no ongoing charges to a third party, and who are comfortable being responsible for all maintenance. It’s the norm for houses.
- Leasehold is often unavoidable for flats. It can be perfectly fine — just go in with eyes open about the lease length, the service charge, ground rent, and how well the building is managed.
Whichever you’re buying, read the lease (or get your solicitor to) and budget for the true monthly cost, not just the mortgage.
Frequently asked questions
Is freehold always better than leasehold? Not necessarily, but freehold gives you more control and no charges to a freeholder. For flats, leasehold (or share of freehold) is usually the only realistic option.
Can a house be leasehold? Yes, though it’s less common and the government has moved to ban most new leasehold houses. Existing leasehold houses still exist, often on older or shared-ownership schemes.
What happens when a lease runs out? Ownership reverts to the freeholder — but in practice the vast majority of leaseholders extend the lease long before this, as a short lease damages value.
Is it hard to sell a leasehold property? It can be if the lease is short (broadly under 80 years), as it affects both value and mortgageability. A longer lease is far easier to sell.
What’s the difference between share of freehold and commonhold? With share of freehold you still have a lease but jointly own the freehold. With commonhold there’s no lease at all — you own your flat outright and jointly manage the shared parts.
Struggling to sell because of a short lease?
Knowing the difference between freehold and leasehold is vital when buying — and a short lease is one of the most common reasons a property is hard to sell on the open market.
If that’s the position you’re in, We Buy Any House can help. We’ll give you a free, no-obligation cash offer and can complete in as little as 7 days, or on a timescale that suits you. Find out how to sell your house fast for cash.
This article is general information, not legal advice. Leasehold law is changing, always check the current position and consult a qualified solicitor or conveyancer for your specific situation.