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Freehold or Leasehold?

Jun 21st 2023

Both “leasehold” and “freehold” relate to distinct forms of property ownership in England so let's take a look at what the difference is...

Both “leasehold” and “freehold” relate to distinct forms of property ownership in England. “leasehold” is the more common phrase. An explanation of each is provided below:

1. Freehold:

If you own a piece of real estate on a freehold basis, it indicates that you have complete control of the building as well as the ground that it is situated. You are the sole owner of the property and have a tenure that lasts for an undetermined amount of time. 

Homeownership is a form of property ownership that is most commonly connected with residences. In this form of ownership, the homeowner has full authority over the property and is responsible for its upkeep as well as any costs related to it. Because they provide a higher level of ownership and control, freehold properties are typically regarded as being more attractive than other types of real estate.

2. Leasehold ownership:

On the other side, leasehold ownership entails owning a piece of property for a predetermined amount of time that is outlined in a lease agreement. When a property is owned on a leasehold basis, the land on which it was constructed is normally owned by the landlord or the freeholder. 

Apartment buildings, flats, and even certain houses can be found to be held under a leasehold property arrangement. You, as the lessee, have the legal right to occupy and make use of the property for the entirety of the term of the lease, provided that you adhere to any and all conditions that are mentioned in the lease agreement. You do not, however, own the land itself in its entirety. The freeholder will often keep some rights and obligations for themselves, such as the responsibility of maintaining the common parts of a building or the responsibility of collecting service charges from leaseholders for the purpose of maintaining the property and providing other services.


When purchasing a leasehold property, you will typically be required to pay ground rent to the freeholder. In addition, you may be required to pay additional fees for things like insurance, maintenance, and other services. Although lease terms can be as short as one year or as long as 999 years, they often cover a longer period of time. If the value of the property drops as the lease term nears its conclusion, the current lessee may be required to either negotiate an extension of the lease or hand over possession of the property to the freeholder.

It is essential to be aware that the laws and regulations that pertain to leasehold and freehold properties can be difficult to understand and may be different depending on the circumstances. Therefore, it is always a good idea to seek the counsel of an attorney or consult the appropriate authorities for specific information or ramifications about a particular piece of real estate.


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