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Freehold vs leasehold: the differences, and what to check before you buy
Freehold means you own the building and the land it stands on, with no time limit. Leasehold means you own the right to live in a home for a set number of years under a lease, while a freeholder owns the building. Most houses are freehold and most flats are leasehold. With leasehold, the lease decides what you pay each year, what you can change and whether a lender will offer a mortgage.
Last checked 17 September 2026. This guide covers England and Wales. Scotland ended most long residential leases, and Northern Ireland has its own rules.
Leasehold homes in England
4.90 million
About 20% of all homes, 2024 to 2025 estimate
Leasehold homes that are houses
31%
1.52 million houses. The other 69% are flats
Ground rent on new leases
Zero
Most new long leases granted since 30 June 2022 carry a "peppercorn" rent
Lease length to watch
Under 80 years
Extending usually costs more, and fewer lenders will lend
What is freehold?
If you buy a freehold, you own the property and its land outright, for as long as you choose to keep it. There is no landlord, no ground rent and no lease running down.
You are responsible for all repairs and insurance. Bigger changes still need planning permission, and the deeds may include restrictive covenants, such as limits on extensions.
What is leasehold?
A leasehold is a long tenancy. You buy the lease, which gives you the home for a fixed term, often 99, 125 or 999 years from when it was first granted. The freeholder (the landlord) owns the building and usually looks after the structure and shared areas.
Leases are sold on with the years that are left, so a 99-year lease granted in 1990 has around 63 years to run today. When a lease ends, the home goes back to the freeholder unless it has been extended.
Freehold vs leasehold: the key differences
| Freehold | Leasehold | |
|---|---|---|
| What you own | The building and the land | The right to occupy the home under a lease. The freeholder owns the building and land |
| How long | No time limit | The years left on the lease |
| Ground rent | None (but see estate charges below) | Set by the lease. Zero on most new leases since 30 June 2022 |
| Service charges | None, but you pay for your own repairs | Usually yes, for shared repairs, cleaning, insurance and management |
| Permissions | Planning rules and any covenants | Often need the freeholder's consent for alterations, letting or pets, sometimes for a fee |
| Lease extension | Not needed | A statutory right for most flats and houses. Cost rises as the lease shortens |
| Mortgages | Usually straightforward | Lenders check lease length, ground rent and service charges |
| Typical homes | Most houses and bungalows | Most flats and maisonettes, some new-build houses and most shared ownership homes |
Share of freehold and commonhold explained
Share of freehold
You own a lease plus part of the freehold
The flat owners jointly own the freehold, often through a company, and each also holds a lease. There is no outside landlord, and owners can usually agree lease extensions between themselves. Decisions and costs are shared.
Commonhold
Own your flat outright, with no lease
Each owner holds their flat as freehold and the building is run by a commonhold association of owners. It has existed since 2002 but very few homes use it. The government plans to make it the default for new flats.
Freehold flat
Often hard to mortgage
Without a lease, repair duties between neighbours can be hard to enforce. Many lenders will not accept them.
Flying freehold
Part of a freehold sits over someone else's
Common where a room is above a shared passage. Lenders often accept a small overhang. Read our guide to flying freehold.
Ground rent and service charges: what you pay
Ground rent is a payment to the freeholder for the land, with nothing provided in return. Older leases may set a fixed amount or one that rises, for example doubling every 10 or 25 years. Most new long leases granted since 30 June 2022 can only charge a peppercorn (zero), but older leases keep their terms when resold.
Service charges cover the costs of running the building: buildings insurance, cleaning, lighting, repairs and often a reserve fund for big jobs. They can change each year, and you can ask for a summary of how they are worked out.
For larger works, the landlord must consult leaseholders (a "section 20" consultation) if any leaseholder would pay more than £250 for the work, or more than £100 a year under a long-term agreement.
Leasehold houses and "fleecehold" estates
Around 1.5 million houses in England are leasehold, including many shared ownership homes. Some developers also sold new-build houses on leases with rising ground rents, leaving owners with homes that were hard to sell or mortgage.
A ban on most new leasehold houses is written into the Leasehold and Freehold Reform Act 2024, but it is not yet in force. See our leasehold reform tracker for the latest.
Buying freehold does not always mean no charges. On many newer estates the roads and green spaces are not adopted by the council, so owners pay a management company through an estate rentcharge or covenant, often called "fleecehold". Ask what the charge is, how it can rise and what happens if it goes unpaid, as some lenders check these terms.
Short lease mortgages: what lenders look for in a lease
The lease is the lender's security too, and a short lease or costly terms make a home harder to sell. Criteria vary a lot, but these checks are typical.
What mortgage lenders typically check
- Years left at the start: some lenders want 85 years or more when the mortgage begins. Others accept less.
- Years left at the end: many set a minimum number of years remaining when the mortgage ends, often somewhere between 30 and 50. A longer mortgage term can push you below it.
- Ground rent: rents that double often, or that are high compared with the home's value (some lenders use 0.1%), can be a problem. Ground rent above £250 a year (£1,000 in London) can also raise a legal risk that some lenders avoid.
- Service charges: these count in your affordability.
- Building safety: for some flats, the valuer may need fire safety paperwork, such as an EWS1 form, before the lender goes ahead.
How lease length and mortgage term fit together
Illustrative examples, each with a 30-year mortgage
A short lease does not always rule out a mortgage. A common fix is for the seller to start a statutory lease extension and pass the benefit to you on completion.
How lease extensions work, and what drives the cost
Under today's rules, most flat owners can add 90 years to the lease with ground rent cut to zero, and no longer need to have owned the flat for two years first. Leasehold house owners have separate rights, including buying the freehold.
The premium you pay the freeholder mainly depends on:
- Years left: the shorter the lease, the higher the premium.
- Marriage value: once a lease is under 80 years, you usually pay the freeholder half of the extra value the extension adds.
- Ground rent: a higher or rising rent usually means a higher price.
- Property value: premiums are worked out from the value of the flat.
- Fees: your own solicitor and surveyor, and usually the freeholder's reasonable legal and valuation costs too.
The 2024 Act plans to abolish marriage value, but that is not in force and has no start date. Our leasehold reform tracker keeps the status up to date.
Buying the freehold: collective enfranchisement
Flat owners can club together to buy the freehold of their building. It usually needs to be a building of two or more flats where most flats are on long leases, and at least half of the flats must take part.
- OrganiseOwners agree to take part, usually through a company.
- Get adviceA valuer prices the freehold and a solicitor checks the building qualifies.
- Serve noticeThe solicitor serves a formal notice on the freeholder with a proposed price.
- Agree or go to tribunalMost cases settle. If not, a tribunal can decide the terms.
Owners often then grant themselves longer leases, creating share of freehold flats. If you only want control of management, the right to manage lets leaseholders take it over without buying the freehold.
Should I buy a leasehold flat? Questions to ask first
A leasehold flat can be a sound purchase. The risks sit in the detail, so ask these questions early, ideally before paying for a survey and legal work.
Leasehold buyer's checklist
- Lease length: exactly how many years are left, and will it still suit lenders at the end of your mortgage?
- Ground rent: how much, and when and how it can rise.
- Service charges: the last three years of accounts, this year's budget and the size of the reserve fund.
- Major works: any planned works or section 20 consultations, and who pays.
- Buildings insurance: who arranges it, what it costs and any claims.
- Building safety: for buildings with cladding or fire safety issues, any EWS1 form or landlord's certificate.
- Restrictions: rules on letting, short lets, pets, alterations and flooring.
- Management: who the freeholder and managing agent are, and whether there are disputes.
Your solicitor will cover most of these through the leasehold information pack. A good survey can flag problems with the building too. See why enhanced property surveys can be worth it.
Leasehold reform: what is changing
Planned changes include abolishing marriage value, a £250 cap on existing ground rents, more rights over service and estate charges, and commonhold for new flats. Most are not yet in force, and until they are, lenders judge a property on today's rules. See our leasehold reform 2026 tracker.
Freehold vs leasehold FAQs
Is freehold better than leasehold?
Freehold gives more control and no lease to run down. For flats, leasehold is normal, and a long lease with low ground rent in a well-run building can be a good buy.
How many years left on a lease do you need for a mortgage?
It varies. Some lenders want 85 years or more at the start, and many want a minimum left when the mortgage ends. Under 80 years, your choice of lenders narrows.
Can I get a mortgage on a leasehold house?
Often, yes, if the lease is long and the ground rent terms are reasonable. Frequently doubling ground rents can be a problem.
Is share of freehold the same as freehold?
No. You own a leasehold flat plus a share of the freehold, which usually means more control and easier lease extensions.
Do I still pay ground rent if I buy a flat after June 2022?
Possibly. The zero ground rent rule covers new leases granted since 30 June 2022, not older leases being resold.
Buying a leasehold or freehold home?
Lease length, ground rent and estate charges can all narrow your lender options, so it pays to check before you offer.
Quick Mortgages is whole-of-market and not tied to any lender, with access to more than 110 lenders including specialist lenders. We charge no broker fees and help clients across the UK from our Birmingham office. See our purchase mortgages and first-time buyer mortgages.
We arrange mortgages, not lease extensions or freehold purchases. Get legal advice from a solicitor and valuation advice from a qualified surveyor about any lease.
Sources
- MHCLG, Leasehold dwellings, 2024 to 2025 (4.90 million leasehold dwellings, 20% of stock; 69% flats, 1.52 million houses)
- GOV.UK, Leasehold property guide (ground rent since 30 June 2022; section 20 consultation thresholds of £250 and £100 a year; buying the freehold)
- Leasehold Reform (Ground Rent) Act 2022
- Leasehold Reform, Housing and Urban Development Act 1993 (90-year flat lease extensions; collective enfranchisement) and Commonhold and Leasehold Reform Act 2002
- Leasehold and Freehold Reform Act 2024 and Commencement (No. 2) Regulations 2025 (two-year rule removed from 31 January 2025)
- Housing Act 1988 (ground rent thresholds for assured tenancies)
- Published intermediary lending criteria from UK mortgage lenders, August 2026 (unexpired lease terms, ground rent tests)
Correct on 17 September 2026 and may change.
Disclaimer:
This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.
While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.
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