Freehold vs. Leasehold: What Are You Actually Buying?

13 January, 2026 3 minutes reading time

However, many buyers don’t realise that they aren’t always buying the land the house is on. In England and Wales, property ownership mainly falls into two categories: Freehold and Leasehold. Understanding the differences can really help you avoid unexpected costs and potential legal issues down the line.

Freehold: You Are the Master of Your Castle

Buying a freehold gives you full ownership of the building and land, registered as the “freeholder.’ Benefits include no ground rent or service charges, and freedom to decorate, extend, or have pets. However, you’re responsible for repairs, maintenance, and insurance.

Freehold is probably the simplest form of property ownership because there’s no landlord or ground rent involved. While most houses in England are sold as freehold, there are some exceptions. 

Leasehold: A Long-Term Right to Occupy

Understanding leasehold properties can be complex. With a leasehold, you have the right to live in a property for a set number of years, called the “term.” The land and structure belong to the landlord.

You usually pay service charges for communal cleaning and repairs, as well as ground rent to the landlord. Be aware of “restrictive covenants” that may restrict things like wooden flooring, subletting, or owning a dog. When the lease ends, ownership reverts to the landlord. Most prefer a lease with 90 to 125 years remaining for peace of mind.

Flats are often sold as leasehold due to shared ownership. This was common for some houses too, but less so after 2019, when most new-build houses can’t be sold as leasehold, with few exceptions. 

Leasehold Reform

The Leasehold and Freehold Reform Act has made the system much fairer for homeowners. If you are buying now, you may benefit from:

• An ability to legally extend your lease by 990 years, effectively ending the “ticking clock” worry.
• No longer needing to own a flat for two years before extending the lease. You can start the process the day you move in.
• The abolition of a complex fee called “marriage value”. This makes it much cheaper to extend a lease that has dropped below 80 years.
• Almost all new-build houses are being sold as freehold. 

Things to Watch Out For

Keep a keen eye out for specific terms in your contract. When you see words like “Doubling Ground Rent,” “Section 20 Notices,” “Review Periods,” or “Event Fees,” it’s wise to ask your solicitor for a clear explanation. Doubling ground rent can make selling your home trickier down the line, so it’s important to know what you’re signing. Section 20 notices are important because they cover major repairs and potential costs that could result in a large one-off bill. Check whether your service charges are capped or could increase indefinitely to avoid surprises later. And if you’re considering retirement living, be aware that Event Fees—sometimes up to 10% of the sale price—could apply when you sell your home. Being informed helps you feel more confident and in control of your property journey. 

Our Advice

A freehold offers more freedom and fewer monthly fees, while a leasehold is often a more affordable entry point into the property market. Thanks to recent reforms, leaseholders now have more power and protection than before. Just ensure your solicitor checks the “fine print” before you exchange contracts.

If you would like more information or guidance on buying property, please don’t hesitate to contact us. We’re here to help.

Please note that all views, comments or opinions expressed are for information only and do not constitute and should not be interpreted as being comprehensive or as giving legal advice. No one should seek to rely or act upon, or refrain from acting upon, the views, comments or opinions expressed herein without first obtaining specialist, professional or independent advice. While every effort has been made to ensure accuracy, Curtis Parkinson cannot be held liable for any errors, omissions or inaccuracies.

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