Property & Buying · 2026/27
Leasehold vs Freehold in the UK: Complete 2026/27 Guide
Leasehold or freehold is one of the most important questions to settle before buying a home in England or Wales, and it is one that many first-time buyers misunderstand. The difference affects what you actually own, what you pay each year in ground rent and service charges, whether you can get a mortgage, and what the property will be worth when you sell. This 2026/27 guide explains both forms of ownership, the costs involved, and the questions to ask before you commit.
What freehold means
When you own a property freehold, you own both the building and the land it sits on outright, with no time limit. There is no landlord, no ground rent and no lease to extend. You are responsible for maintaining the whole property, but you have complete control over it (within the usual planning and legal rules).
Most houses in England and Wales are sold freehold. Freehold is generally the simpler and more desirable form of ownership where it is available, because it avoids the recurring costs and uncertainties that come with a lease.
What leasehold means
When you own a property leasehold, you own the right to live in it for a fixed number of years set out in the lease, but the land and the structure of the building belong to the freeholder (the landlord). Most flats are leasehold because they sit within a shared building, so someone has to own and maintain the common structure.
As a leaseholder you typically pay ground rent to the freeholder and service charges towards maintaining the building, and you must follow the terms of the lease, which can include restrictions on alterations, subletting or keeping pets.
The lease has a fixed length, often 99, 125 or 999 years when first granted. The remaining term is critical to value, mortgageability and the cost of any future extension.
Leasehold vs freehold at a glance
| Freehold | Leasehold | |
|---|---|---|
| Own the land | Yes | No |
| Time limit | None | Fixed lease term |
| Ground rent | No | Possible (older leases) |
| Service charge | No (you maintain it) | Usually yes |
| Typical property | Houses | Flats |
Why lease length matters for your mortgage
A lease is a wasting asset: every year the remaining term falls, and a shorter lease is worth less. This matters for mortgages because lenders set minimum lease-length requirements. Many lenders are cautious about leases with under about 70 to 80 years remaining, and some require a minimum term remaining at the end of the mortgage.
A lease falling below 80 years is a particular warning sign. Below this point, an extra cost called marriage value can apply, making the extension more expensive, and the pool of lenders and buyers narrows. If you are buying a leasehold flat, always confirm the exact number of years remaining and factor any extension cost into your offer.
Extending a lease and buying the freehold
Leaseholders generally have legal rights to extend their lease or, in many cases, to buy the freehold (a process known as enfranchisement). For a flat, buying the freehold usually requires a sufficient proportion of leaseholders to act together; for a house, an individual leaseholder may be able to do so alone, subject to qualifying conditions.
The cost of extending a lease or buying the freehold depends on the property value, the remaining term, the ground rent and local market values, plus legal and valuation fees on both sides. There is no single figure, and the longer you wait once the lease nears 80 years, the more expensive it tends to become.
Leasehold reform has been a long-running area of government policy aimed at making extensions and enfranchisement simpler and cheaper, and at limiting ground rents. Because the detail continues to evolve, check the current rules with a solicitor before relying on any specific cost or process.
Share of freehold and commonhold
Share of freehold means the leaseholders jointly own the freehold of their building, usually through a management company. You still hold a lease on your own flat, but you share control over service charges and maintenance, ground rent is typically nominal, and extending your own lease becomes far easier. It is generally seen as more attractive than a plain leasehold.
Commonhold is an alternative form of ownership that allows the owner of a flat to own it outright while jointly managing the shared parts through a commonhold association, without a lease. It has historically been little used in the UK, but it has featured in reform proposals as a possible long-term replacement for leasehold flats.
Common mistakes when buying leasehold
- Not checking the remaining lease length - a short lease can be hard to mortgage and costly to extend.
- Ignoring escalating ground rent - some older leases double the ground rent at intervals, which can harm value and mortgageability.
- Not reviewing service charge history - ask for several years of accounts and any planned major works.
- Overlooking lease restrictions - rules on subletting, pets and alterations can affect how you use the property.
- Assuming you can extend later cheaply - delay past the 80-year point and the cost generally rises.
- Forgetting the freeholder reputation - a difficult freeholder or managing agent can make leasehold ownership stressful.