If you own the freehold of your home, it implies 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 but not the structure or land and need to pay ground rent to the freeholder.

Freehold vs leasehold: the essential distinctions

Do you understand what is suggested by a freehold or leasehold residential or commercial property? Experienced estate agent, Ian Harris helps describe the essential differences.

Sign up for our video channel

Make certain you stay up to date with our video material as it's released. By subscribing you will be alerted as quickly as brand-new videos are released.

What does leasehold indicate?

You are buying a lease from the freeholder for the right to live in the residential or commercial property for a set number of years. You will not technically own the residential or commercial property outright, the freeholder (or proprietor) will continue to own the residential or commercial property and the ground it rests on. Leasehold is commonplace when buying a flat or house as it sits within a larger structure.

The variety of leasehold homes has actually nevertheless grown in the last few years, especially with new builds that are sold straight through the designer.

Recent changes to the law

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

Learn more about what's altering for leasehold

Main things to understand that have actually been implemented up until now are:

- If you own a flat, you can now extend your lease without waiting 2 years initially (since January 2025).

• This means that more leaseholders in mixed-use buildings can apply for the right to manage