If you're buying property in London — particularly a flat — you'll quickly come across the terms "freehold" and "leasehold." Many buyers find these confusing, and the distinction matters enormously to the long-term value of your property and your experience as an owner.
At Battersea Surveyors, we work with leasehold property every day — through lease extension valuations, building surveys, and shared ownership assessments. Here's our plain-English guide to what these terms mean and what to look out for.
What is Freehold?
When you buy a freehold property, you own the building and the land it sits on outright — permanently, with no time limit. Most houses in the UK are sold freehold. There's no landlord, no annual ground rent, no lease to expire, and no freeholder to deal with. You have full ownership.
Freehold gives you the most complete form of ownership. You're responsible for all maintenance, but you make all decisions about the property (subject to planning laws).
What is Leasehold?
When you buy a leasehold property, you're buying the right to occupy it for a fixed number of years — the length of the lease. The land and building are still owned by the freeholder (also called the landlord). When the lease expires, ownership of the property reverts to the freeholder.
Most flats in England are leasehold. New-build houses were sometimes sold leasehold — a practice that has been heavily criticised and largely banned since 2022. Leases are typically granted for 99, 125, or 999 years when the property is first sold, though they get shorter with time unless extended.
Key Differences That Affect Buyers
| Issue | Freehold | Leasehold |
|---|---|---|
| Duration of ownership | Permanent | Fixed term (reduces annually) |
| Ground rent | None | Possibly (now capped at peppercorn for new leases) |
| Service charges | None | Often yes — can be significant |
| Mortgage availability | Straightforward | Depends on remaining lease (min. 70–85 years for most lenders) |
| Alterations | Your decision (planning permitting) | May need freeholder's consent |
What to Check When Buying Leasehold
- Remaining lease length: Below 80 years is expensive to extend; below 70 years can make mortgage difficult
- Annual ground rent: How much is it? Does it escalate? Under new laws, new leases can only charge a peppercorn — but older leases may still have onerous ground rents
- Service charge: What does it cover? Has it been rising? Ask for three years of accounts
- Major works reserve fund: Is there money set aside for future repairs?
- Management company: Is the building well managed? Poor management leads to spiralling service charges and deferred maintenance
"I always tell clients who are buying a leasehold flat: the lease is almost as important as the property itself. Get a copy of the lease before you book a survey — there's no point surveying a property with a 60-year lease and an onerous ground rent clause."— James Hartley, MRICS
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