Whether a property is freehold or leasehold is one of the most important factors in a property purchase, yet many buyers do not fully understand the implications.
- The risks of short leases
- Service charges and ground rent
Freehold explained
A freehold owner owns the property and the land outright. No ground rent, no service charge to a landlord, no expiring lease. Most houses are sold freehold.
Leasehold explained
A leasehold property gives the right to occupy for the duration of a lease. The land is owned by the freeholder, who may charge ground rent and has certain rights over building management.
The risks of short leases
A lease below 80 years makes mortgages difficult and extension expensive. Check remaining lease length and extension cost before buying any leasehold property.
Service charges and ground rent
Leaseholders pay service charges for communal maintenance. These vary dramatically in quality and cost. The Leasehold and Freehold Reform Act 2024 made significant changes but many legacy issues remain.
Bottom line
Always check freehold versus leasehold status. For leasehold, check the lease length, ground rent, service charge history, and planned major works. Use a solicitor experienced in leasehold conveyancing.