If you own the freehold of your home, it indicates that you own the structure and the land it sits on. If your residential or commercial property is leasehold, you own the residential or commercial property however not the building or land and need to pay ground lease to the freeholder.

Freehold vs leasehold: the key distinctions

Do you comprehend what is indicated by a freehold or leasehold residential or commercial property? Experienced estate representative, Ian Harris helps describe the crucial differences.

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What does leasehold imply?

You are acquiring a lease from the freeholder for the right to reside in the residential or commercial property for a set number of years. You will not technically own the residential or commercial property outright, the freeholder (or landlord) will continue to own the residential or commercial property and the ground it rests on. Leasehold is prevalent when buying a flat or apartment or condo as it sits within a larger building.

The number of leasehold homes has however grown recently, particularly with new builds that are offered directly through the designer.

Recent changes to the law

The Leasehold and Freehold Act 2024 is now law, however specific parts of the Act are being executed one at a time so not everything has been done yet. You can see the progress of the modifications here. Eventually there will be a on the sale of new leasehold flats, making Commonhold the new default period instead, where each unit-holder owns the freehold of their home.

Find out more about what's altering for leasehold

Main things to understand that have actually been carried out so far are:

- If you own a flat, you can now extend your lease without waiting 2 years initially (as of January 2025).

• This means that more leaseholders in mixed-use structures can use for the right to handle