Freehold vs Leasehold

In England and Wales, property is either freehold or leasehold. Understanding the difference matters because it affects your ongoing costs, your rights as an owner, and in some cases whether a lender will offer you a mortgage at all.

Freehold

When you buy a freehold property, you own the building and the land it sits on outright, with no time limit. Most houses are freehold. You are responsible for all maintenance, but you do not pay ground rent or service charges to anyone. You have full control over the property (subject to planning rules), and there is no lease that can expire. From a mortgage perspective, freehold properties are straightforward — there are no lease-related restrictions.

Leasehold

A leasehold property means you own the building (or flat) for a fixed period under the terms of a lease, but someone else — the freeholder — owns the land. Most flats are leasehold. The lease is typically granted for a long period, often 99 or 125 years when new, but it counts down over time and is not automatically renewed.

As a leaseholder, you typically pay ground rent to the freeholder and a service charge towards the maintenance of shared areas. These costs factor into your affordability assessment — lenders deduct them from your disposable income, which can reduce the maximum you are offered.

Short leases and mortgage restrictions

Most lenders require a minimum remaining lease length, typically at least 70 to 85 years at the time of application, and they usually want the lease to extend beyond the mortgage term by a meaningful margin. A property with fewer than 80 years remaining on the lease becomes harder to mortgage and harder to sell. Extending a short lease can be expensive, so it is essential to check the lease length before making an offer. See our property types guide for more on what lenders accept.

Commonhold

Commonhold is a newer form of ownership designed as an alternative to leasehold for flats. Under commonhold, flat owners jointly own the freehold through a commonhold association. It avoids the problems of diminishing lease length and ground rent. However, commonhold remains rare in practice — the vast majority of flats are still sold as leasehold.

Last updated: April 2026