Buying the leasehold on a property gives you the right to use the property for a fixed period of time at a given price on the basis of a lease contract. The term of a lease can be up to 999 years however you will need to check how much is left on the lease when you come to buy. You do not actually own the property as such, and at the end of the term of the lease the property is returned to the owner (freeholder). As a leaseholder you have the right to extend the lease or even to buy the freehold if certain criteria are met, though the application process can be expensive and take time.

The lease stipulates who is responsible for maintaining and repairing different parts of the property and any conditions you must meet as a resident. Check the conditions of the lease carefully if you are intending to buy.

You will also have to pay a ground rent to the freeholder, usually a small amount per annum. Your solicitor should check that the seller is up to date with ground rent payments before you sign the contract. There will also be an annual service charge, to cover leasehold building insurance, maintenance, repairs and cleaning of common areas, gardening of grounds etc.

Depending on the terms of the lease there may be leaseholder restrictions. i.e. what a leaseholder can do with a property, pets and also on their activities (such as restrictions on noise level) for the benefit of all residents in a building. Although leasehold building insurance is taken out by the landlord, if you buy a leasehold property you will be responsible for your own contents insurance.

You will not be able to get a mortgage on a property where the lease is less than 60 years. Lenders normally want at least 20 years left on the lease after the end of the mortgage term.


A freehold property is where the owner has complete and absolute ownership of the land, and all buildings that stand on the land. There is no limit of time to hold the property like in the case of leasehold property. A freehold property lies with the title holder unless they transfer it of their own accord. The owner of a freehold property is therefore in a position to do what they wish to and with the property, in accordance with local planning regulations.

Share of Freehold:

Some flats are sold with a share of the freehold for the building. There is still a lease for each flat but the residents grant the lease as a group and act as landlord. If you're buying a flat with a share of the freehold your solicitor still needs to review a copy of the lease.

There are a number of advantages to owning a share of the freehold. Freeholders can grant longer leases without having to pay a premium, they can get together and change any terms of the lease that cause problems, and they can decide between themselves on a fair service charge and where the money is spent.

However owning a share of the freehold can pose problems, looking after the property could be time-consuming and if your neighbours are uncooperative you may never be able to agree on what work needs doing. It would make sense to employ a managing agent to deal with any problems that may arise.