Leasehold
Definition
Ownership of a property for a fixed period, as set out in a lease. Most flats in England and Wales are leasehold. The leaseholder owns the property but not the land. Key considerations: lease length (below 80 years is problematic), ground rent, service charges, and restrictions on alterations or subletting.
Why it matters
Leasehold is the ownership type for most flats in England and Wales, and it comes with obligations and costs that freehold doesn't — ground rent, service charges, and a wasting asset (the lease gets shorter over time). A short lease (under 80 years) makes a property harder to mortgage and triggers a costly 'marriage value' on extension.
Frequently asked questions
What lease length should I avoid?
Below 80 years is the critical threshold. Once a lease drops below 80 years, the cost of extending increases sharply because you must pay 'marriage value' — 50% of the gain in property value from extending. Below 70 years, many lenders won't offer a mortgage at all.
Can I extend my lease?
Yes. Qualifying leaseholders of flats have a statutory right to extend by 90 years at a peppercorn (zero) ground rent — and since 31 January 2025 you no longer need to have owned the flat for two years first. The cost depends on the property value, current lease length, and ground rent. The Leasehold and Freehold Reform Act 2024 is expected to reduce these costs further once its valuation reforms come into force.
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