It is a constant source of astonishment to those unfamiliar with the vagaries of British property law that millions of people quietly accept living with a house buying system which is – quite literally – feudal.
The distinction between freehold and leasehold property existed at least as far back as the Domesday Book of 1086. Land equaled wealth and power in the Middle Ages and wealthy and powerful families wanted to retain and monetise it. And so the concept of leasing swathes of land to peasant farmers for a set period of time, in return for a share of their crop or their labour, was born.
Almost 1,000 years later anybody considering buying property in London – and in particular an apartment – will need to get their heads around the concept of spending good money on a property in order to own it for a set period of time, rather than owning it free and clear for as long as they like.
What is Leasehold?
A leasehold property gives you the legal right to occupy a home for a fixed period of time, rather than owning the land and building outright. The length of the lease varies depending on when it was granted, but many London flats were originally sold with leases of 99 or 125 years, while some newer developments have leases extending to 999 years.
Although you own the property for the duration of the lease, the building itself remains under the ownership of the freeholder. Leaseholders will usually contribute towards the upkeep of the building through service charges and, depending on the terms of the lease, may also pay ground rent. The lease may also contain restrictions covering alterations, pets or subletting.
What is Freehold?
Freehold ownership is more straightforward. When you buy a freehold property, you own both the building and the land it stands on indefinitely.
That means you are responsible for maintaining the property yourself, but you also have greater autonomy. There is no landlord, no service charge and no ground rent, although you may still require planning permission or other statutory approvals before carrying out significant works.
Freehold ownership is most commonly associated with houses in London, although there are exceptions.
Comparing Leasehold and Freehold side by side
The key difference between leasehold and freehold ownership is not simply what you own, but how that ownership affects your responsibilities, costs and control over the property.
With a leasehold property, responsibility for the wider building typically sits with the freeholder or managing agent. They will usually arrange maintenance of the structure and communal areas, as well as buildings insurance, with leaseholders contributing towards these costs through service charges.
Service charges can vary significantly between buildings, particularly in prime London developments where facilities might include concierge services, security, landscaped gardens, gyms, swimming pools and other amenities. Black Brick’s guide to service charges in prime London developments explores this in more detail.
Ground rent may also apply, although the position has changed considerably. Ground rent on most new residential leases granted since June 2022 is restricted to a peppercorn, while the Government’s current reform programme proposes a £250 annual cap for many older leases, falling to a peppercorn after 40 years. That proposal is not yet the same thing as a rule already in force.
Another important consideration is the remaining length of the lease. A shorter lease can affect a property’s value, mortgageability and future saleability. Although qualifying leaseholders have important legal rights to extend their leases, buyers should understand the remaining term and the potential cost of an extension before committing to a purchase.
Freehold ownership removes many of these considerations. There is no lease to extend and no freeholder or managing agent responsible for the property. However, that also means the owner bears the full cost and responsibility for buildings insurance, repairs, upgrades and ongoing maintenance.
For buyers, the choice is therefore partly about priorities. Leasehold can provide the convenience of professionally managed communal spaces and building maintenance, while freehold generally offers greater independence and control.
The majority of apartments in London are leasehold, while freehold ownership is more commonly associated with houses. For anyone considering a leasehold purchase, the individual terms of the lease, service charge arrangements and management of the building should form an important part of the due diligence process.
Black Brick understands the complexities of leasehold ownership and works with trusted legal advisers who can help buyers assess the lease and identify potential issues before purchase.
Leasehold vs Freehold: The Key Differences at a Glance
| Issue | Leasehold | Freehold |
|---|---|---|
| Length of ownership | Fixed term under the lease | Indefinite |
| Land ownership | Usually owned by the freeholder | Owned with the property |
| Building costs | Service charges may apply | Owner pays costs directly |
| Ground rent | May apply to older leases | No leasehold ground rent |
| Alterations / use | Lease may require consent | Greater autonomy, subject to planning and other law |
| Common in London | Most flats | Most houses |
Understanding Share of Freehold and Commonhold
There are more uncommon alternatives to the leasehold vs freehold debate.
Some apartments are sold with a share of freehold, which means that the individual owners within a building co-own equal shares in the freehold. Typically share-of-freehold homes are period conversions with only a small number of units, and sometimes the owners set up a company as an ownership vehicle for the freehold.
The owners are able to decide collectively how to manage issues like building maintenance – be warned, this can sometimes become fractious, but is usually considered preferable to being stuck under the control of a landlord.
A crucial benefit is that co-freeholders can often agree lease extensions between themselves without the same commercial premium that would be payable to an external freeholder, although the legal mechanics still need to be handled properly.
Because of this, share-of-freehold homes can be more marketable than otherwise comparable leasehold properties – although good management, sensible service charges and a healthy sinking fund still matter.
Another outlier buyers might come across is commonhold, a relatively new ownership structure in England and Wales. Under the commonhold system buyers own their individual property outright, without a lease expiry date. There is no landlord and therefore no leasehold ground rent. All owners are members of a commonhold association for the building and share communal costs.
Commonhold is now central to the Government’s reform programme. The draft Commonhold and Leasehold Reform Bill was published in January 2026. It proposes a new commonhold framework, a restriction on new leasehold flats so that commonhold becomes the default tenure, and an easier route for existing buildings to convert. Following pre-legislative scrutiny, the Government has indicated that it intends to bring forward the final Bill in autumn 2026.
How Leasehold Reform Is Changing the Market
Beyond the move towards commonhold, the Government is pursuing a series of measures intended to make leasehold fairer and give homeowners greater control.
The reform programme is unusually important for buyers because it spans both the Leasehold and Freehold Reform Act 2024 and further legislation which, as at August 2026, has not yet completed its passage through Parliament. In other words, some changes are enacted but awaiting implementation, while others remain proposals.
- Lease extensions: the 2024 Act provides for 990-year statutory extensions at a peppercorn ground rent once the relevant provisions are commenced.
- Marriage value: the 2024 Act provides for its removal from the lease-extension calculation, which is particularly important for leases at or below 80 years, but implementation is still being worked through.
- Ground rent: the draft 2026 Bill proposes capping many older ground rents at £250 per year, falling to a peppercorn after 40 years. The House of Commons Library notes that commencement is currently expected no earlier than late 2028, subject to parliamentary approval.
- Service charges and management: the wider reform programme is intended to improve transparency and strengthen leaseholders’ ability to challenge unreasonable costs.
- Commonhold: the Government intends commonhold to become the default tenure for new flats, subject to the final legislation and transition arrangements.
For the current legislative position, see the House of Commons Library briefing on commonhold and leasehold reform and the Government explainer on lease extensions and freehold purchases.
What Buyers Should Look At Beyond the Ownership Type
While buyers might struggle to come to terms with the whole concept of buying leasehold, it is important to remember that not all leaseholds are equal.
A property in a building with a high service charge and a lease with onerous ground rent provisions will not only be expensive to run but might prove difficult to sell. Similarly, any restrictions imposed by the freeholder could impact both your enjoyment of the property and its resale potential.
The length of the lease is also crucial. The 80-year point has historically been particularly important because shorter leases can be harder to mortgage and, under the current valuation regime, more expensive to extend. The 2024 reforms are intended to change the economics of lease extensions, but buyers should take advice on the law actually in force at the point they transact rather than assume the new regime already applies.
A Leasehold Buyer’s Checklist
- How many years remain on the lease?
- What is the current service charge and what has it been over the past three to five years?
- Is there a sinking or reserve fund, and are major works planned?
- Does ground rent apply, and does the lease contain any review mechanism?
- Are there restrictions on pets, subletting, renovations or short-term occupation?
- Who manages the building and how well is it run?
- Are there existing disputes between leaseholders, the freeholder or managing agent?
- Could any aspect of the lease affect mortgageability or future resale?
What About Very Short Leases?
On the flip side, some properties with very short leases can be worth considering if you are looking for a short-term base in London. Their asking prices may be sufficiently discounted that, in particular circumstances, buying a short-lease property can compare favourably with renting for the same period.
This is a specialist strategy rather than a conventional purchase. Mortgage finance may be difficult or unavailable, the extension cost can be uncertain, and the exit route needs to be considered before you buy. It is therefore an area where valuation and legal advice are particularly important.
For international buyers using London as an occasional base, our pied-à-terre guide and international buyer guide cover some of the wider practical considerations.
Is Freehold Always Better?
If you buy a freehold house none of the lease-specific issues above applies. But that does not automatically make freehold the better choice for every buyer.
Houses in prime London are of course significantly more expensive to buy than flats and usually require more time and money to run and maintain. They can also lack the leisure amenities, concierge services and on-site security that many apartment buyers prioritise.
The more useful question is therefore not simply ‘leasehold or freehold?’, but whether the ownership structure, running costs, restrictions and long-term resale prospects of a particular property suit the way you intend to use it.
Frequently Asked Questions
Is leasehold bad when buying a flat in London?
No. Leasehold is the normal ownership structure for most London flats and many excellent properties are leasehold. What matters is the quality of the lease: its remaining length, service charges, ground rent provisions, restrictions, building management and any planned major works. A well-run building with a long, clean lease can be a straightforward purchase; a poorly drafted or expensive lease can create problems regardless of how attractive the apartment is.
What lease length should buyers look for?
There is no single ideal number, but buyers should pay close attention as a lease approaches 80 years because the property can become harder to finance and the economics of extending the lease become more important. Reform is changing this area, so a solicitor and valuer should confirm the rules and likely extension cost that apply at the time of purchase.
Is share of freehold better than leasehold?
Often it is attractive because the flat owners collectively control the freehold and can make decisions about management and lease extensions. But it is not automatically superior. The co-owners still need to run the building effectively, collect sufficient service charges, fund major repairs and resolve disagreements. Good governance matters as much as the ownership label.
What is commonhold?
Commonhold allows the buyer to own their individual unit outright while becoming a member of an association responsible for shared parts of the building. It removes the expiring lease and external freeholder found in conventional leasehold. The Government is seeking to make commonhold the default tenure for new flats, but the detailed 2026 reforms are still progressing through the legislative process.
Should I avoid a property because it has a short lease?
Not necessarily, but short leases require specialist advice. The discount can create an opportunity for cash buyers or those with a particular time horizon, but financing, extension costs and resale all need to be modelled carefully before exchange. A cheap purchase price on its own does not make a short-lease property good value.
