Understanding Leasehold Vs Freehold

Understanding Leasehold Vs Freehold
If you’re looking to buy a home, it’s vital to understand the difference between buying a property which is freehold, and one which is leasehold.

Let us explain the differences between the two, and the financial implications for homebuyers.


When you purchase a freehold property, you’re essentially buying it outright. That means you can live in it for as long as you want and there won’t be any additional monthly charges to pay on top of your mortgage. You’ll be responsible for maintaining the property.

If you’re buying a flat in a building which is shared with other people, then you’ll buy a share of the freehold in that building, with the owners of the other flats each owning a share too.


When you buy a leasehold property, you are effectively only buying the right to live in that property for a certain period of time. Someone else will own the freehold of the property, and they will normally charge you an annual ground rent to live there.

As a leaseholder, there will usually be various other costs to pay too. These typically include annual service charges and maintenance fees, which are charged so that the freeholder can maintain and repair the property.

To read about other issues leaseholders must be aware of, read our guide here. Or head to our Facebook, Twitter or LinkedIn pages to explore more articles.
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