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Freehold vs Leasehold: Which is Right for You?

17 November 2025

When you start looking for a home in England, one of the first things you’ll encounter is whether the property is freehold or leasehold.

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These two forms of ownership can have very different consequences for your rights, responsibilities, and long-term financial position. Understanding the distinction at the outset can help you make an informed and confident decision.

What Does Freehold Mean?

If you purchase a freehold property, you own both the building and the land it stands on outright. There is no time limit on your ownership, and you are solely responsible for the upkeep and maintenance of the property.

Freehold is typically the simplest and most straightforward form of ownership:

  • No landlord
  • No ground rent
  • No lease length to worry about

Most houses in England are sold as freehold, although there are some exceptions.

What Does Leasehold Mean?

Leasehold ownership gives you the right to occupy a property for a fixed period, often 99, 125, or even 999 years. The land itself, however, remains owned by the freeholder (also known as the landlord).

As a leaseholder, you may be required to contribute towards:

  • Ground rent (although ground rents on most new leases have now been abolished).
  • Service charges and maintenance fees for communal areas such as gardens, corridors, or lifts.
  • Major works, including structural repairs or external decoration.

Leasehold is especially common with flats because the building and shared areas need to be managed collectively. Some houses were historically sold on a leasehold basis too, but since 2019 most new-build houses can no longer be sold as leasehold, save for certain limited exceptions.

Key Differences at a Glance

Freehold and leasehold carry very different implications. The main distinctions include:

  • Ownership:
    • Freehold = permanent ownership of the property and the land.
    • Leasehold = ownership for a set term only.
  • Costs:
    Leaseholders may face ongoing charges, including service charges, fees for alterations, and the cost of extending the lease.
  • Control:
    Freeholders enjoy greater freedom over alterations (subject to planning laws). Leaseholders may need the freeholder’s consent for even minor works.
  • Lease Term:
    A lease is a diminishing asset. As the term shortens, particularly below 80 years, the cost of extending it increases, and the property can become harder to sell.

Recent Reforms

The leasehold landscape is changing. Key updates include:

These reforms are designed to create fairer and more manageable arrangements for leaseholders.

Which Is Better - Freehold or Leasehold?

Many buyers prefer freehold for its clarity and lack of ongoing charges. However, leasehold is the norm for flats and may be the only practical choice in certain areas. The suitability of either option depends on:

  • Your long-term plans.
  • The terms of the lease.
  • How long is left on the lease.
  • Whether additional costs fit your budget.

Different systems apply in Scotland and Northern Ireland, where traditional leasehold ownership is rare or has been abolished.

How We Can Help

Whether you are considering a freehold house or a leasehold flat, it is vital to understand what you are committing to before you proceed. We will:

  • Review the title documents thoroughly.
  • Explain your rights and obligations in clear, practical terms.
  • Highlight any risks or costly clauses in the lease.
  • Advise you on the implications of lease length and potential extensions.

If you are unsure which form of ownership is right for you, or you need advice on a specific property, our property team will guide you throughout the process.  

Contact our Property Department or call: 01202 526343

 

 

Further Information
Leases Residential Property