If you own the freehold of your home, it indicates that you own the structure and the land it rests on. If your residential or commercial property is leasehold, you own the residential or commercial property however not the building or land and need to pay ground rent to the freeholder.

Freehold vs leasehold: the crucial distinctions

Do you comprehend what is indicated by a freehold or leasehold residential or commercial property? Experienced estate representative, Ian Harris assists describe the essential distinctions.

Sign up for our video channel

Ensure you keep up to date with our video content as it's published. By subscribing you will be notified as quickly as new videos are released.

What does leasehold indicate?

You are purchasing a lease from the freeholder for the right to reside in the residential or commercial property for a set number of years. You won't technically own the residential or commercial property outright, the freeholder (or landlord) will continue to own the residential or commercial property and the ground it rests on. Leasehold is prevalent when buying a flat or home as it sits within a larger building.

The number of leasehold homes has actually nevertheless grown over the last few years, particularly with new builds that are offered directly through the developer.

Recent modifications to the law

The Leasehold and Freehold Act 2024 is now law, but private parts of the Act are being implemented one at a time so not whatever has actually been done yet. You can see the progress of the changes here. Eventually there will be a restriction on the sale of new leasehold flats, making Commonhold the brand-new default tenure instead, where each unit-holder owns the freehold of their home.

Find out more about what's altering for leasehold

Main things to know that have been executed up until now are:

- If you own a flat, you can now extend your lease without waiting two years first (as of January 2025).

• This means that more leaseholders in mixed-use structures can request the right to handle