Leasehold vs Freehold
What it means for you? (In a nutshell)
To help you become a house move pro and to get the most out of buying your home, we’ve summarised the differences. If you don’t read on… it may cost you.
We kid you not, buying a house will introduce you to a whole wave of new terminology that may leave you scratching you head at the best of times – and particularly when it comes to… two words, leasehold and freehold. Understanding these technical phrases could mean all the difference when buying a new home. At the end of the day, it makes the difference between owning your own home outright, and having a landlord.
Explore the differences
- You own the property not the land
- Most likely to be flats/apartments
- Owned by a landlord
- Pays annual property management fees
- Larger costs
- You must seek permission for home alterations
- Pays ground rent
- Ensure property is valued based on amount of years on the lease
- Freeholder owns building and the land it stands on
- Usually houses
- No permission needed for home alterations
- Responsibility for own property management
- Less costs
- Doesn’t pay ground rent
Why does it make such a difference?
If you buy a leasehold property you'll be known as the leaseholder. This means you own the property but not the land it stands on – the landlord does. Flats are usually owned on a leasehold basis. Buying a freehold property means that you're the sole owner of both the building and the land it stands on. Houses are usually sold as freehold.