If you own the freehold of your home, it indicates that you own the building and the land it rests on. If your residential or commercial property is leasehold, you own the residential or commercial property however not the structure or land and must pay ground lease to the freeholder.
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Freehold vs leasehold: the crucial differences

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

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What does leasehold mean?

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 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 variety of leasehold homes has actually nevertheless grown over the last few years, especially with brand-new builds that are sold directly through the designer.

Recent changes to the law

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

Find out more about what's altering for leasehold

Main point to know that have 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 indicates that more leaseholders in mixed-use structures can look for the right to handle