When you buy a home, the main difference between freehold vs leasehold is whether you own the land it sits on. Freehold means you own the building and the land outright, while leasehold means you only own a right to occupy the property for a fixed period of time. Around five million homes in England and Wales are leasehold, and most of these are flats.
What freehold means
Buying a freehold property means you own both the building and the ground it stands on. Citizens Advice confirms that a freehold purchase includes the land. You own the property outright and there is no time limit on your ownership.
Because you own the land and the building, you are entirely responsible for maintaining the property. When you own a freehold home, you are responsible for maintaining:
- The roof and chimney
- The exterior walls
- The foundations and the structure
Citizens Advice says freehold includes the land, while leasehold does not and usually involves ground rent and possibly service charges. You simply pay your mortgage, your utility bills and your council tax, and you cover the cost of your own maintenance.
You do not have a landlord to ask for permission before making changes, although planning permission and building regulations still apply.
What leasehold means
Buying a leasehold property means you enter into a legal agreement with the landlord, called a lease. This document sets out exactly how many years you own the property. According to the official government guide on leasehold property, you only own a leasehold property for a fixed period of time and you do not own the land it sits on.
Most flats in England and Wales are leasehold. Houses can be leasehold too, and they usually are if you buy them through a shared ownership scheme. The landlord who owns the land is sometimes known as the freeholder.
When you buy a leasehold flat, you are buying the right to live in that specific space for the time left on the lease.
You must follow the rules set out in your lease. These rules might tell you whether you can keep a pet, run a business from home or make internal alterations. Breaking them can have consequences, so read them carefully. Your conveyancer will read this document and explain your obligations before you exchange contracts.
Freehold or leasehold compared
Understanding the difference between the two types of ownership is easier when you view them side by side. The table below compares freehold and leasehold on four points.
|
Feature |
Freehold |
Leasehold |
|---|---|---|
|
Land ownership |
Includes the land |
Does not include the land |
|
Time limit |
No time limit |
Fixed number of years |
|
Ground rent |
Not part of the definition |
Usually, but new qualifying long leases since 30 June 2022 can charge only a peppercorn |
|
Service charges |
Not part of the definition |
Possibly |
Specific lease terms differ, so rely on your conveyancer to explain the details of the home you are buying.
Ground rent and service charges
When you live in a leasehold property, you usually have to pay ground rent and service charges to the freeholder. Ground rent is a regular payment made to the landlord simply for the rent of the land your home sits on. Service charges are your share of the cost to maintain the building and the communal areas.
Landlords must give a written cost summary of these charges on request. In England, service charge money must be held in trust at a regulated financial institution.
If your building needs significant repairs, the landlord cannot simply hand you a massive bill without warning. They must consult leaseholders on major works above certain financial thresholds. If you feel the costs you are being asked to pay are too high, leaseholders can challenge unreasonable charges at the First-tier Tribunal.
The rules around ground rent changed recently for new properties. Under the Leasehold Reform (Ground Rent) Act 2022, ground rent in most new leases is limited to one peppercorn a year. This means no money can be charged or paid. This rule puts an end to ground rents for new, qualifying long residential leasehold properties in England and Wales.
This peppercorn rule came into force on 30 June 2022, but not before 1 April 2023 for retirement properties. It applies to new, qualifying long leases, so ask your conveyancer what the lease of the flat you are buying says.
Why the lease length matters to a mortgage lender
The number of years left on a lease matters to a mortgage lender. When you apply for a mortgage, the lender will send a valuer to assess the home. This valuation done for the lender is not a survey. It is carried out for the lender's benefit.
Before making an offer, you should check the lease length is acceptable to the mortgage lender. Ask your lender what it accepts. The valuer's report and the lender will ultimately decide if the property meets their criteria.
The official government toolkit names high fees to extend a lease as it runs down in years as a common problem for leaseholders. A shorter lease may therefore be costly to extend later.
If you are looking at a property that requires an extension to satisfy a lender, you will need professional advice to understand the costs involved. You can read more about how this process works in our guide to lease extension valuation.
What happens when a lease runs out
Because a lease is a temporary right to occupy the property, it has a strict end date. According to the government guide on ending or changing your lease, ownership of the property returns to the landlord when the lease comes to an end.
Options include extending the lease or buying the freehold, and a conveyancer can explain how they work. When a lease ends, the property returns to the freeholder.
This is why lease length is worth checking early. Citizens Advice says to check the lease length is acceptable to the mortgage lender before making an offer. Ask the estate agent for the exact lease length before you spend money on a survey or legal fees.
How a surveyor and valuer treat tenure
When you buy a home, you will rely on different professionals to check different parts of the transaction. It is a common mistake to rely on the mortgage valuation, thinking it is a survey. It is not. The valuation is a limited check for the lender's benefit.
A home surveyor inspects the physical condition of the building. They will visit the property and look for defects, damp, structural movement and safety risks. Home surveys follow three official levels. Level 1 describes condition, flags risks and urgent defects, and suits conventional, newer homes in good condition. Inspections take roughly one to two hours.
Level 2, still widely called a HomeBuyer Report, suits conventional homes in reasonable condition. It adds advice on repairs and maintenance, and comes as a survey only or a survey and valuation. This is a visual, non-intrusive inspection that takes two to four hours.
Level 3, still widely called a building survey or full structural survey, is the most detailed. It suits older, larger, altered, unusual or run-down homes, or homes you plan to alter. A Level 3 inspection takes four to eight hours. Reports for all levels usually follow within about three to ten working days.
It is a common mistake not to read the terms of engagement before the inspection. If you skip this document, you might be surprised to learn that the surveyor will not lift carpets, move heavy furniture or test the gas and electricity services. The survey looks at the building's condition, not the lease.
Tenure, lease terms, ground rent and who repairs what are checked in the lease by the conveyancer. Your conveyancer or solicitor is the person qualified to give you legal advice on contracts, boundaries and disputes. If you are unsure whether you need a condition check for a leasehold flat, you can read our guide on getting a survey when buying a flat.
What a survey costs and how to book one
Surveys are sold at a fixed fee quoted up front. The price is driven by the survey level, the property value, its size, age, complexity and location. Choosing the cheapest level for an old or altered house is a common mistake that can leave you exposed to hidden repair bills.
The table below shows the typical cost of each survey level.
|
Survey type |
Typical cost |
|---|---|
|
Level 1 |
£300 to £450 |
|
Level 2 |
£400 to £950 |
|
Level 3 |
£600 to £1,500 or more |
These are typical 2026 ranges, not quotes, and local prices will differ.
When you instruct a surveyor, look for a RICS regulated firm and confirm it on the RICS Find a Surveyor service.
Under the Consumer Rights Act 2015, a surveying service must be carried out with reasonable care and skill. Services arranged online or by phone normally carry a 14-day cooling-off period. If you ask for the work to start inside this period, you pay for what has been done.
Good advice means asking the right questions before you book. You should always:
- Get two or three like-for-like quotes that state the survey level.
- Check whether a valuation is included in the price.
- Ask what the turnaround time is for the final report.
- Ask about the surveyor's experience with that property type and the local area.
- Confirm whether the surveyor will talk the report through by phone.
What the government says about leasehold reform
Leasehold law is currently going through a period of significant change. The government leasehold toolkit for England, published on 20 May 2026, outlines several reforms that are either in force now or planned for the future.
Some changes are already live and actively helping leaseholders. The two-year qualifying period before you can extend a lease or buy a freehold was abolished in January 2025. This means buyers no longer have to wait two years after purchasing a property to start the extension process. Right to Manage changes also came into force from March 2025.
Other proposed changes are not yet law. A draft Commonhold and Leasehold Reform Bill was published in January 2026. If passed, this draft Bill would cap existing ground rents at £250 a year, which would then become a peppercorn after 40 years. The draft Bill would also ban leasehold for most new flats.
The government page states clearly that this cap will not increase anyone's ground rents. Because this Bill is a draft and not law, you must check the official government website for updates and ask your conveyancer how the current law affects your purchase. Other transparency measures under the 2024 Act are planned as quickly as possible, but currently have no fixed dates.
Commonhold is another way to own a flat. It is a form of freehold for flats, with no lease term, no ground rent and collective management through a Commonhold Association. If you need help understanding your rights under current leasehold law, LEASE is the government-funded Leasehold Advisory Service that gives free advice.
Common questions
What does ground rent mean?
Ground rent is a regular payment that a leaseholder makes to the freeholder of the property. It is essentially rent paid for the land that the building sits on. For new, qualifying long leases created since 30 June 2022, this is restricted to a peppercorn, meaning no financial payment can be charged.
Can a leasehold house be bought?
Yes, houses can be leasehold, although it is less common than flats. They are usually sold as leasehold if they are bought through a shared ownership scheme. When you buy a leasehold house, you still only own it for a fixed number of years and you do not own the land beneath it.
What is commonhold?
Commonhold is an alternative way to own a flat that removes the need for a lease. It is a form of freehold for flats where there is no lease term and no ground rent to pay. The building is managed collectively by the flat owners through a Commonhold Association.
Who pays for repairs on a leasehold property?
Your lease sets out who repairs what, and your conveyancer checks it. Service charges are your share of the cost of maintaining the building and the communal areas.
What happens when a lease expires?
When a lease comes to an end, the legal right to occupy the property finishes. Ownership of the property returns to the landlord. Options include extending the lease or buying the freehold, and a conveyancer can explain how they work.
Your next steps
Deciding between a freehold and a leasehold property is a standard part of buying a home in England and Wales. To make sure you buy a property that is secure and easy to mortgage, follow these steps before you commit:
- Ask the estate agent to confirm the tenure of the property before you book a viewing.
- If the property is leasehold, ask exactly how many years are left on the lease and what the current ground rent is.
- Check with your mortgage broker or lender to ensure the remaining lease length meets their criteria.
- Instruct a conveyancer to read the lease, check the service charges and explain your legal responsibilities.
- Book a surveyor once your offer is accepted and well before you exchange contracts.
- Use the survey findings to get repair quotes, then decide whether to proceed, renegotiate or walk away.
Buying a leasehold flat or a freehold house both require a careful check of the building's physical condition. A detailed home survey will highlight urgent defects, damp and structural risks before you sign the contracts. To get started and compare local quotes, you can find a surveyor near you.
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