Freehold vs Leasehold: What’s the Difference?

When you're buying a property, one of the key things to understand is whether it’s freehold or leasehold. These terms affect what you actually own, your responsibilities, and your long-term costs. Let’s break it down…

What is a Freehold Property?

If you buy a freehold, you own the property and the land it sits on outright. It’s yours until you choose to sell it – there’s no time limit, and no landlord or leaseholder involved.

Freehold is the most common setup for houses and is generally the preferred option for most buyers.

Benefits of freehold:

  • You own the land and the building

  • No ground rent or lease fees to worry about

  • You’re responsible for maintenance, but also in full control

What is a Leasehold Property?

With leasehold, you’re buying the right to live in the property for a set period of time – often 99, 125 or even 999 years – but you don’t own the land it stands on. That remains with the freeholder (sometimes called the landlord).

Leasehold is more common with flats or apartments, especially in urban areas.

What to watch for with leasehold:

  • You’ll usually pay ground rent, service charges, and maintenance fees

  • You might need permission from the freeholder for things like major alterations

  • When the lease gets short (under 80 years), the property becomes harder to sell or remortgage

  • Extending a lease can be expensive

Can You Buy the Freehold?

Yes – in some cases, leaseholders can buy the freehold of their property. This is called freehold enfranchisement, and it often applies when leaseholders in a block of flats club together to purchase the freehold from the landlord. Alternatively, if you own a leasehold house, you might be able to buy the freehold directly.

Buying the freehold gives you more control and often increases the value and appeal of the property.

What About Share of Freehold?

Sometimes, especially with flats, you might come across a property listed as “share of freehold”. This means you still technically own a lease, but you also own a share of the freehold – usually jointly with other flat owners in the building.

Share of freehold offers more control over things like maintenance, service charges, and managing the building. But you still need to check how long the lease is – that still matters when it comes to value and mortgageability.

How Does This Affect Your Mortgage?

Lenders often prefer freehold properties – they’re considered lower risk and easier to sell.

If you’re buying leasehold, lenders will look closely at:

  • Lease length (typically 85+ years is fine)

  • Ground rent terms (some clauses can be off-putting)

  • Service charges and maintenance plans

If the lease is too short or the terms are unusual, it could limit your mortgage options – but that’s where we come in.

J Finance’s Take

We’ll guide you through the pros and cons of freehold vs leasehold based on your goals, budget and lifestyle. If you’re buying a flat, we’ll check the lease terms and flag anything that might affect your mortgage or future resale. And if you’re unsure whether buying the freehold makes sense, we’ll talk you through your options.

Need help understanding your lease? Want to check if a leasehold property is mortgage-friendly?
Let’s chat – we’re here to help you make informed, confident property decisions.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.