Purchasing a property is likely one of the biggest financial decisions you'll make in your lifetime. In the UK, there are three main types of property ownership: freehold, leasehold, and commonhold. This comprehensive guide focuses on the two most common types - leasehold and freehold - helping you understand their key differences and implications for homebuyers in 2024.
A freehold property means you own both the building and the land it stands on outright, with no time limit. This is the most straightforward type of property ownership and is typically how most houses in the UK are sold.
As a freeholder, you:
A flying freehold occurs when part of your freehold property extends over or under another property (such as a room built over a shared passageway). While less common, it's important to note that some mortgage lenders may require additional information before lending on properties with flying freeholds.
A leasehold property means you own the right to occupy the property for a fixed period, typically between 99 and 999 years when first granted. The land and building belong to the freeholder (or landlord), and you essentially lease these from them for the duration specified in your lease.
| Aspect | Freehold | Leasehold |
| Ownership | Full ownership of property and land | Temporary right to occupy |
| Duration | Permanent | Fixed term |
| Costs | No ground rent or service charges | Annual ground rent and service charges |
| Maintenance | Full responsibility | Shared responsibility with freeholder |
| Modifications | Greater free (subject to planning) | Usually need freeholder permission |
| Resale value | Generally more stable | Can decrease with shorter lease |
| Insurance | Full responsibility | Building insurance usually handled by freeholder |
After owning a leasehold property for two years, you generally have the right to extend your lease by:
View the Government's guide on lease extension here.
The cost of extending depends on:
Leaseholders can join together to buy the freehold of their building, known as collective enfranchisement. This requires:
View LEASE's collective enfranchisement guide here.
Service charges typically cover:
View the government's service charge guidance here.
Many leasehold properties require contributions to a sinking fund for:
View the Land Registry property search service here.
At Innovus, we provide expert leaseholder asset management services. We act as an informed, professional point of contact for leaseholders in managing their property investments.
Our team has extensive experience and knowledge across both leasehold and freehold properties. We can advise on negotiating fair lease extensions, purchasing freeholds, service charge consultations and more.
With a transparent, honest approach and competitive pricing structure, Innovus is a trusted partner for leaseholders in optimising and protecting their assets.
Get in touch today to discuss your requirements.