In the UK, properties are generally sold as either leasehold or freehold.  

Anthony Swift, Legal Director & Deputy Head of Residential Property at Jackson Lees, breaks down what these terms mean and how they impact you if you’re buying a home.  

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Freehold 

When you buy a freehold property, you own the building and the land it sits on outright. This means you generally have complete control of the property and are responsible for maintaining it.  

• Advantages of freehold properties
• Long term security, you own it indefinitely
• No ground rent or service charges
• Freedom to make changes (subject to planning permission and any covenants relating to the property)
• Disadvantages of freehold properties
• Sole responsibility of maintenance, upkeep and repairs
• Potentially higher costs, as freehold properties can be more expensive 

Leasehold 

Buying a leasehold property means you own the property for a set period, typically between 99-999 years, but you don’t own the land it’s built on. The land is instead owned by a landlord, who leases it to you.  

• Advantages of leasehold properties
• Lower purchase prices, with leasehold properties often being cheaper than freehold ones
• Less maintenance, in some arrangements the landlord may be responsible for maintaining the building’s exterior or any communal areas
• Disadvantages of leasehold properties
• Expiration of the lease, reverting ownership to the landlord once it ends. This can affect the property’s value as the lease gets shorter.
• Ground rent and service charge fees that can increase over time
• Restrictions to modifications, you may need permission from the landlord to make any changes.  

Key considerations for homebuyers  

When deciding whether a freehold or leasehold is right for you, we recommend you consider the following points:  

• Length of the lease: For leasehold properties, check how many years are left on the lease. A shorter lease can make it harder to sell or remortgage the property.
• Service charges and ground rent: Ensure you’re aware of costs involved with leasehold properties, as they can add up and impact your budget.
• Rights and restrictions: Research any restrictions or obligations associated with either type of property, from who is responsible for maintenance or if you can make alterations.
• Future Plans: If you plan to live in the property long-term, a freehold might offer more security. However, if you’re looking for a lower upfront cost or a property with less maintenance, leasehold could be a better option. 

Jackson Lees Can Help

Understanding the difference between leasehold and freehold is crucial in making an informed decision about your future home. 

At Jackson Lees, we’re here to help you navigate the complexities of property ownership and ensure you make the best choice for your needs. Please give us a call, request a callback or make an enquiry to find out how we can help.