Freehold vs Leasehold: Which Should You Buy?
Whether a property is freehold or leasehold affects your rights, costs, and how easy it is to sell. The Leasehold Reform (Ground Rent) Act 2022 and the Leasehold and Freehold Reform Act 2024 have significantly improved leaseholder protections.
Freehold
- ►You own the property and the land it stands on outright
- ►No ground rent or service charges (usually)
- ►No lease expiry to worry about
- ►Common for houses; rare for flats
Pros
- ✓Full control over your property
- ✓Lower ongoing costs — no service charge
- ✓Easier and cheaper to sell
Cons
- ✗You are solely responsible for all maintenance
- ✗Shared driveways or walls can still cause disputes
- ✗Harder to buy if in a block of flats
Best for: Buyers who want maximum ownership security and minimal ongoing fees, typically purchasing houses.
Leasehold
- ►You own the property for a fixed term (e.g. 99, 125, 999 years)
- ►A freeholder owns the land; you pay ground rent (now capped at a peppercorn for new leases)
- ►Service charges cover shared building maintenance
- ►Very common for flats; sometimes applies to houses
Pros
- ✓Often the only option for flat ownership
- ✓Building maintenance handled by management company
- ✓Leasehold Reform Act 2024 strengthened rights to extend leases and buy the freehold
Cons
- ✗Lease below 80 years makes mortgaging and selling difficult
- ✗Service charges can be high and increase unpredictably
- ✗Less control over building decisions
Best for: Buyers purchasing flats or new-build properties, who are comfortable managing service charges and lease length.
Bottom Line
Freehold is generally preferable if you have the choice, but for flats leasehold is usually unavoidable. Always check the remaining lease term — below 80 years you should negotiate an extension before exchange.
Frequently Asked Questions
What happens when a leasehold falls below 80 years?
Below 80 years the cost of extending the lease increases significantly because 'marriage value' is added — this can add thousands to the extension cost. Many mortgage lenders also refuse to lend on short leases.
Can I extend a leasehold?
Yes. After two years of ownership you can apply for a statutory lease extension, adding 90 years to the existing term at a peppercorn ground rent. The Leasehold and Freehold Reform Act 2024 simplified this process.
Is leasehold reform making things better for buyers?
The 2024 Act abolished new leasehold houses, capped ground rents on new leases, and made it easier to extend leases and buy the freehold collectively (enfranchisement). Existing leaseholders gained improved rights too.
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