Quick answer: With freehold, you own the building and the land it stands on with no end date. With leasehold, you own the right to live in the property for a fixed number of years under a lease, while the freeholder owns the building and land. Most houses are freehold and most flats are leasehold.
Buying a home in the UK can be a bit overwhelming, especially when you come across terms like “freehold” and “leasehold.” As a mortgage broker, I’ve seen how confusing this can be for buyers, especially first-timers. But understanding the difference between these two types of property ownership is crucial for making the right decision for your long-term financial goals.
In this guide, I’ll break down what freehold and leasehold really mean in everyday terms and explain how they impact everything from your mortgage to your ongoing costs. Let’s dive in!
The article is updated and correct as of Oct 14, 2026
What is Freehold Property?
When you buy a freehold property, you own both the building and the land it sits on outright. There’s no expiration date or time limit on your ownership—you have complete control over the property for as long as you own it. Most houses in the UK, especially detached and semi-detached houses, are freehold.
Benefits of Freehold:
•No Ground Rent or Service Charges: As the freeholder, you won’t be paying any additional fees like ground rent or service charges, which is typical with leasehold properties.
•Full Ownership Rights: You have the freedom to alter or extend your property, as long as you follow local planning rules. You’re the boss when it comes to maintenance, too.
•Peace of Mind: Freehold ownership offers stability. There’s no lease to worry about running out, no freeholder dictating what you can or can’t do.
However, owning a freehold property means you’re responsible for all the maintenance costs—whether it’s the roof, the walls, or the garden. But for many people, the independence is worth it.
What is Leasehold Property?
If you’re buying a leasehold property, especially a flat or apartment, you’re buying the right to live there for a specific period of time—often 99, 125, or even 999 years. You don’t own the land the property is on—that’s owned by the freeholder (or landlord). Once the lease expires, ownership of the property reverts to the freeholder unless you extend the lease.
Costs to Consider with Leasehold:
Ground Rent: This is an annual fee you pay to the freeholder for the land. It can be a small amount, but some newer leases have ground rents that rise over time, which can get expensive.
Service Charges: These cover the maintenance of shared spaces like hallways, gardens, or the roof. It can vary depending on the building and can sometimes be quite high, especially for retirement properties or larger apartment blocks.
Buildings Insurance: In most cases, the freeholder will handle the buildings insurance, but the cost is passed on to leaseholders through service charges.
Lease Extensions: Once a lease falls below 80 years, extending it usually costs more under the current rules because marriage value becomes payable. The Leasehold and Freehold Reform Act 2024 will abolish marriage value, but that part of the Act is not yet in force, so extending before 80 years is still worth considering.
The Key Differences Between Freehold and Leasehold
Understanding the core differences between freehold and leasehold can help you decide which is right for your situation:
| Feature | Freehold | Leasehold |
|---|---|---|
| Ownership | You own both the property and the land | You own the property, but not the land |
| Ongoing Costs | No additional costs beyond maintenance | Ground rent, service charges, and possible lease extensions |
| Control Over Property | Full control over modifications and extensions | Limited control; permission required from freeholder for changes |
| Lease Expiry | No lease to worry about | Ownership for a fixed term (e.g., 99 or 125 years) |
| Maintenance Costs | You are responsible for the entire property | Shared costs for communal areas; freeholder manages external upkeep |
How Leasehold Affects Your Mortgage
When it comes to getting a mortgage for a leasehold property, the length of the lease is important. Most lenders prefer properties with a lease of 80 years or more. Anything below that can make it tricky to get a mortgage, and if you do, it might come with higher interest rates or less favorable terms.
If you’re considering buying a leasehold property with a short lease (below 80 years), you’ll likely need to negotiate an extension with the freeholder. While this is possible, it’s an expensive process, and it’s important to factor those costs into your overall budget.
Leasehold Reform: What’s Changing?
Leasehold reform in England and Wales is happening in stages. Some changes are already in force, while others are law but not yet switched on, or are still proposals. The 2026 update table below shows where each change stands. Until a change is in force, lenders and solicitors will assess the lease on the current rules.
Common Leasehold Issues to Be Aware Of
While leasehold properties can be more affordable upfront, there are some common issues that buyers need to be mindful of:
•Rising Service Charges: You might find yourself contributing to major repairs or refurbishments in shared spaces, often with little control over how much it costs.
•Ground Rent Increases: Some leases include provisions allowing the freeholder to increase ground rent over time, which can make the property more expensive to hold onto.
•Restrictions on Alterations: Want to make changes to your home? You’ll likely need the freeholder’s permission, and they can say no or charge you for the privilege.
Is Freehold Always Better?
While freehold properties offer more control and freedom, they’re not always the best choice for everyone. For one, they tend to be more expensive than leasehold properties, which could put them out of reach for first-time buyers. Plus, if you’re buying in a city, flats are often leasehold, which might be your only option.
On the other hand, freehold owners are responsible for everything—from major repairs to buildings insurance—so it’s important to consider how much time and money you’re willing to invest in maintaining the property.
Can You Buy the Freehold of a Leasehold Property?
Yes! In some cases, you can purchase the freehold of your leasehold property, especially if you’re in a block of flats. This is known as leasehold enfranchisement, and it gives you more control over the property, including eliminating ground rent. However, it’s a complex process and can be expensive, so make sure to get legal advice before going down this route.
Final Thoughts: Freehold vs Leasehold
Deciding between freehold and leasehold comes down to your personal situation. If you want complete control over your home and fewer ongoing costs, freehold might be the best option. On the other hand, leasehold properties are often more affordable and available in city centers, but come with added fees and less autonomy.
As your mortgage broker I can help you navigate decisions for long-term plans. If you need any further advice or are looking for help with financing your property purchase, feel free to get in touch.
Leasehold vs Freehold: What Mortgage Lenders Check
Both types of tenure can be mortgaged, but a leasehold property gives a lender more to check. These are the points that most often come up during underwriting and the conveyancing process.
| What is checked | Freehold | Leasehold |
|---|---|---|
| Length of ownership | No end date | Fixed term set out in the lease |
| Lease length | Not applicable | Lenders set a minimum remaining term, often 70 to 85 years at application, and many want the lease to run for decades beyond the end of the mortgage |
| Ongoing charges | Usually none, although some new build estates have estate charges | Ground rent and service charges, which some lenders include in affordability |
| Ground rent terms | Not applicable | Ground rent that doubles or rises sharply can make a property harder to mortgage |
| Permission for changes | Planning and building rules only | Often needs the freeholder’s consent under the lease |
Why lease length matters
The shorter the remaining lease, the fewer lenders will consider the property and the harder it can be to sell later. A lease that has dropped below 80 years is often flagged by solicitors because extending it can cost more. If you are buying a flat with a short lease, ask whether the seller will start a lease extension before completion.
Share of freehold
Some flats are sold with a share of the freehold, where the leaseholders jointly own the freehold through a company. You still hold a lease, but you and the other owners control the building and can usually agree lease extensions between yourselves.
Example: two similar flats are for sale in the same street. One has 120 years left on the lease and a fixed ground rent, the other has 72 years left and a ground rent that doubles every ten years. The first will normally suit a much wider range of lenders.
2026 Update: Where Leasehold Reform Stands
| Date | Change | What it means and source |
|---|---|---|
| Early 2025 | Two-year ownership rule removed | Leaseholders can now start a lease extension or freehold purchase straight after buying, instead of waiting two years. HomeOwners Alliance |
| Not yet in force | Marriage value abolition and 990-year extensions | Both are in the Leasehold and Freehold Reform Act 2024 but are not yet in force. The government plans to fix technical problems in the Act through the Commonhold and Leasehold Reform Bill and has consulted on the valuation rates used in the calculations. House of Commons Library |
| 27 Jan 2026 | Draft Commonhold and Leasehold Reform Bill published | Proposes capping ground rent on existing leases at £250 a year, falling to a peppercorn after 40 years, and generally ending new leasehold flats in favour of commonhold. These are proposals and are not yet law. HomeOwners Alliance |
Related Mortgage Guides
- Flying freehold mortgages
- Equity release on leasehold flats
- New build mortgages
- Shared ownership mortgages
- Needing Advice home
This guide is reviewed by Damian Youell CeMAP, Senior Mortgage Broker. Meet the rest of our team.
FAQs
What is the difference between freehold and leasehold in simple terms?
Freehold means you own the property and the land. Leasehold means you own the property for a set period, but not the land.
Why are leasehold properties cheaper than freehold?
Leasehold properties are often cheaper because the buyer doesn’t own the land and must pay ground rent and service charges.
Can you convert a leasehold property to freehold?
Yes, you can buy the freehold through a process called leasehold enfranchisement. It’s most common in flats.
Does a short lease make it harder to get a mortgage?
Yes, leases under 80 years can make it more difficult to get a mortgage. You may need to extend the lease first.
What are the ongoing costs of owning a leasehold property?
You’ll usually pay ground rent, service charges, and may need to extend the lease as it gets shorter.
Damian Youell
Damian is the founder of NeedingAdvice.co.uk and the firm’s Senior Mortgage Broker. He specialises in helping clients across the UK with straightforward and complex mortgage cases, including self-employed applications, adverse credit, buy-to-let, remortgages and first-time buyer mortgages.
Alongside mortgage advice, Damian also supports business owners with protection planning, including Relevant Life Policies, Shareholder Protection and Keyperson Cover.
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