Leasehold or freehold: how to check and what to ask
Tenure decides what you actually own. It also decides whether a bargain flat is a bargain or an expensive problem with a nice kitchen.
The difference in one paragraph
Freehold means you own the building and the land it stands on, indefinitely. Leasehold means you own the right to occupy the property for a fixed number of years, granted by the freeholder. Most flats in England and Wales are leasehold. Houses usually are not, though some are, particularly on certain estates.
How to check
The registered sale of a property records whether the transaction was freehold or leasehold, so the past sale record is a quick first indicator. The definitive answer is the title register held by HM Land Registry, which your solicitor will obtain and which anyone can order for a small fee. The listing and the energy certificate are not reliable sources for tenure.
Lease length is the number that matters
| Years remaining | Practical position |
|---|---|
| 125+ | Comfortable. Normal lending and resale |
| 90-125 | Fine, but plan an extension eventually |
| 80-90 | Act soon. Extension costs rise once the lease drops below 80 years |
| Under 80 | Marriage value applies, extension becomes markedly more expensive |
| Under 70 | Some lenders decline. Price should reflect it |
Extending a lease is a legal process with a cost that grows as the term shortens. If the seller has already started the process, ask whether the benefit can be assigned to you on completion.
Ground rent and service charges
- Ground rent: for leases granted since the Leasehold Reform (Ground Rent) Act 2022 came into force, ground rent on most new residential long leases is limited to a peppercorn, meaning effectively nothing. Older leases can still carry rising ground rents, and escalating clauses have caused real lending problems.
- Service charge: ask for at least three years of accounts and the current budget. Look at the trend, not one year.
- Reserve fund: is there one, how big is it, and what is it earmarked for?
- Major works: ask whether any section 20 consultation is live or planned. A pending roof or cladding project can land on you after completion.
Share of freehold
In many small blocks the leaseholders jointly own the freehold. You still hold a lease, but the freeholder is effectively you and your neighbours, which usually makes lease extensions cheaper and management more transparent. It also means the block's problems are yours to organise and fund.
Common questions
Can I buy the freehold of my house?
Often yes. Leaseholders of houses and groups of flat owners have statutory rights to buy the freehold subject to conditions. It is a legal process and worth advice.
Is leasehold always worse?
No. A long lease with a peppercorn ground rent and sensible service charges behaves much like freehold in practice. The risk is in short leases and poorly run blocks.
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