What Is Freehold?
Freehold means you own the property and the land it stands on outright, with no time limit. You are responsible for all maintenance and repairs, but you don't pay ground rent, service charges (unless on a managed estate), or face lease expiry. Most houses in England and Wales are freehold.
The main advantage of freehold is simplicity and control. There is no landlord to deal with, no permission needed for alterations (beyond planning), and no risk of the lease running down. Freehold properties are generally easier to sell and mortgage than leasehold equivalents.
What Is Leasehold?
Leasehold means you own the right to live in the property for a set period — typically 99 to 999 years when new, but diminishing over time. The freeholder (landlord) owns the building and the land. You pay ground rent and, in flats, service charges for building maintenance and communal areas.
The key risk with leasehold is the lease running short. Below 80 years, extending becomes significantly more expensive because the freeholder can claim 'marriage value' — a share of the increase in property value that the extension creates. Below 60 years, most mortgage lenders won't lend at all, severely limiting your buyer pool if you need to sell.
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Lease extensions are calculated using a formula set by the Leasehold Reform, Housing and Urban Development Act 1993. The cost depends on the remaining lease length, the property value, and the ground rent. As a rough guide: extending a 75-year lease on a £300,000 flat might cost £15,000–£25,000, while extending a 60-year lease on the same flat could cost £30,000–£50,000.
The Government's Leasehold Reform programme promises to simplify and reduce extension costs, but the legislation has been delayed repeatedly. As of 2026, the existing formula still applies. Use our lease extension calculator for an estimate based on your specific lease terms.
Ground Rent: The Hidden Ongoing Cost
Ground rent is a payment from the leaseholder to the freeholder, separate from service charges. Older leases often have low fixed ground rents (£50–£250/year), but some modern leases introduced escalation clauses — doubling every 10–25 years — that can make the property unmortgageable as the rent exceeds key thresholds.
The Leasehold Reform (Ground Rent) Act 2022 set ground rent to zero on new leases granted after 30 June 2022. But this doesn't affect existing leases. If you're buying a property with an escalating ground rent clause, factor in the future cost and consider whether buying the freehold is worthwhile.
Buying the Freehold: When It Makes Sense
If you own a leasehold house, you have a statutory right to buy the freehold under the Leasehold Reform Act 1967. For flats, collective enfranchisement (buying the freehold with other leaseholders) is possible if 50% or more of qualifying tenants agree. Buying the freehold eliminates ground rent, gives you control over the building, and typically increases the property value by more than the purchase cost.
The decision is clearest when: the ground rent is escalating, the lease is getting short (below 90 years), or you plan to stay long-term. Use our freehold purchase calculator and lease extension calculator to compare the costs of each option.
Frequently Asked Questions
What is the difference between freehold and leasehold? Freehold means you own the property and land outright with no time limit, while leasehold means you own the right to occupy the property for a set period — typically a diminishing lease term — with a freeholder retaining ownership of the land and building.
Is leasehold always a bad option when buying a flat? No — most flats in England are leasehold and it is not inherently problematic if the lease is long (90+ years), the ground rent is zero or nominal, and the building is well managed, ideally with share of freehold held by the leaseholders collectively.
What is marriage value and why does it matter? Marriage value is the increase in property value created by extending a short lease — below 80 years, the freeholder is entitled to claim 50% of this value as part of the extension premium, which is why extending before 80 years remaining is so strongly recommended.
How do I find out how many years are left on a lease? The remaining lease term is stated in the title register held by HM Land Registry — your solicitor will obtain this as part of the conveyancing process, but you can also request a copy of the title register yourself for a small fee via the Land Registry portal.
What does it mean if a flat has share of freehold? Share of freehold means the leaseholders in the building collectively own the freehold through a company they control — this gives them authority over management decisions, building insurance, and the cost of lease extensions, removing the need to deal with an external freeholder.
Key Takeaways
- ✓Freehold = you own the property and land outright; leasehold = you own a time-limited right to live there
- ✓Below 80 years remaining, lease extensions become significantly more expensive due to marriage value
- ✓Below 60 years, most mortgage lenders won't lend — severely limiting your resale options
- ✓Ground rent escalation clauses can make a property unmortgageable — always check the lease terms
- ✓Buying the freehold eliminates ground rent and typically increases the property value