Freehold v Leasehold. Make sure you know what you are buying.
22nd February 2024 by John Munro
If you are thinking of purchasing a property, it is vital you know what tenure it is as this can affect both its value and re-sale. The tenure refers to the different ways you can own a property, the most common of which are Freehold or Leasehold. There is a rarer type, Commonhold, however this will not be covered here.
Below we answer a few common questions which should help clarify the basic differences between Freehold and Leasehold.
What do I actually own?
With a Freehold property, you own the building and the land it stands on outright. With a Leasehold property you have a lease from the Freeholder or Landlord to use the property for a specified number of years. Leases are usually long, running from 99, 125 or 999 years.
Are there any restrictions on the property?
With a Freehold property there may be certain restrictions or covenants written into the title deeds that state what you can or cannot do with the house or land under particular circumstances, however a Leasehold property is likely to have far more restrictions or covenants in the Lease such as not being able to sublet the property, or being allowed to keep any animals.
Make sure you read the Lease carefully to understand the restrictions.
Will I need to pay any additional on-going charges?
With a Freehold property, there is no ground rent or service charges. With a Leasehold property you will generally have to contribute towards the cost of maintenance of the building and any communal areas as well as often paying the Landlord a ground rent each year
It is important that you fully understand all costs payable for the property before you commit to purchase it.
Will I be responsible for maintaining the property?
If you own a Freehold property, you will be responsible for maintaining your own property, the roof, outside walls and land at your own cost. If you own a Leasehold property, you will normally only have to maintain the inside areas of the flat, the Landlord will manage the maintenance of the building and common areas with flat owners paying towards the costs.
Can I make any changes to the property?
If you own a Freehold property you can generally carry out any changes as long as you observe any covenants on the title deeds and obtain the usual planning permission and/or Building Regulation approvals. If you own a Leasehold property will usually also have to obtain permission for any works done to the property from the Freeholder or Landlord.
What is a Share of Freehold?
This applies to when the Freehold of the building or land on which the property is built is owned by a company whose shareholders are the owners of the flats in the building. There will still be a Lease for the flat itself, but in addition you will become a shareholder in the Freehold management company. This is where the term “Share of Freehold” comes from.
How to find out the tenure of a property?
If a property is registered, the Land Registry will hold a record of the tenure of a property, otherwise your Conveyancer can check the title deeds and tell you if a property you are considering is Freehold or Leasehold and if there is also any share in the Freehold.
Contact Us
If you are thinking of buying a home or have any other queries relating to buying or selling a property, please contact Kelly Howe on k.howe@laceyssolicitors.co.uk or 01202 377800.
John Munro
Partner — Commercial and Residential Property
Direct dial: 01202 377839
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“John Munro was friendly and very approachable, advising me with a clear depth of knowledge and experience. I have since recommended him and will do so if asked in the future.”
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“Having dealt with Laceys on many a sale and purchase I’ve always found them to be efficient, knowledgeable and attentive. I wouldn’t hesitate in recommending them to family, friends and clients.”
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“We have always been very happy with the service provided by Laceys Solicitors, in both our business legal requirements and domestic property conveyancing.”
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“You are our solicitor Superhero! Very grateful. ”
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“Changing solicitors is not to be undertaken lightly. However really impressed with the way that John Munro and his associates have dealt with us over the last couple of years in a variety of complex property related transactions and on the commercial and personal front as well. We look forward to working with them going forward.”
John joined Laceys in 2001 on a training contract, having completed a Post Graduate Diploma in Law in 2000, and qualified as a solicitor in 2003. He is now the Head of the Commercial and Residential Property Departments.
He is also the firm’s Senior Responsible Officer under the Law Society Conveyancing Quality Scheme (CQS) with overall responsibility for the management of the property team and their delivery of the excellent service that our clients have come to expect.
John acts in his own capacity for a number of commercial property owners, developers and investors, but also allocates time to ensure his team are up to speed with changing law and professional regulations and clients are provided with members of the team who possess the right skills to deal with their individual requirements, delivering projects in the most time and cost-efficient manner.
Outside of work John seems to spend a great deal of time ferrying his children around but occasionally gets to put his feet up and listen to his eclectic collection of vinyl. He is also not averse to a good cheeseboard and a glass of IPA.
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