Leasehold vs Freehold: What You Need To Know

If you're a first-time buyer in the UK, there's a good chance no one properly explained the difference between leasehold and freehold. Or if they did, it was in some vague legal-speak that didn’t stick.

So let’s strip it down.

First: What’s the difference?

Freehold = you own the property and the land it sits on. It's yours, outright. You’re responsible for everything — roof, structure, garden, drains, all of it. No ground rent. No permission needed to paint a wall.

Leasehold = you own the property for a fixed term (often 99–125 years originally, sometimes more), but you don’t own the land or the building structure. That’s the freeholder’s job. You're basically leasing the space, even if you’ve paid hundreds of thousands to live there.

Where this bites people

Here’s where first-time buyers get caught out:

1. Ground Rent and Service Charges Can Escalate

You might see a flat with “only £250 ground rent”, sounds fine, right? Until you realise there’s a clause letting the freeholder double it every 10 or 15 years. Do the maths. Suddenly you’re paying £4k+ per year in a few decades. That kills resale value.

And service charges? That’s the fee for maintaining shared areas (roofs, gardens, lifts, hallways). These vary wildly, aren’t capped, and are controlled by whoever manages the block, often with zero transparency. You could be stuck footing the bill for dodgy roof repairs or a gold-plated intercom system you never asked for.

2. You Might Need Permission to Do Basic Things

Want to change your windows? Install a new front door? Even lay new flooring? Some leases make you get written permission from the freeholder. And they can charge you for it.

3. Short Leases Are a Nightmare

A lease under 80 years can massively affect mortgageability and resale value. Extending it? Can cost tens of thousands, depending on the length left and your flat’s value. You’ll also have to pay the freeholder’s legal fees. Yes, seriously.

4. The Building Could Be Mismanaged

You’re relying on someone else, often a faceless management company, to maintain the block. If they’re useless, you’ll still be stuck paying. And selling your flat? Buyers might back out the moment they see the reviews or get the service charge pack.

So, should you avoid leasehold completely?

Not necessarily. Lots of first-time buyers end up buying leasehold flats, especially in cities. But go in with your eyes open.

Here’s what to check before even thinking about offering:

• Length of lease: Ideally over 90 years. Under 80? Red flag.

• Ground rent terms: Fixed? Or escalating? Get the clause read.

• Service charges: Past 3 years' history + what’s included.

• Management company reviews: Trustpilot, Google, forums.

• Major works planned: Any big costs coming soon?

• Can you extend the lease? Ask the solicitor to explain the process and cost.

  
  

Final thought

Buying leasehold doesn’t make you an idiot. But not knowing what leasehold really means can cost you thousands down the line. Ask the awkward questions. Get the paperwork early. And if the answers don’t add up, walk away.

Plenty of flats out there. Don’t let a dodgy leasehold trap you in the wrong one.