If you own the freehold of your home, it indicates that you own the building and the land it sits on. If your residential or commercial property is leasehold, you own the residential or commercial property however not the structure or land and should pay ground lease to the freeholder.

Freehold vs leasehold: the essential distinctions
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Do you comprehend what is indicated by a freehold or leasehold residential or commercial property? Experienced estate representative, Ian Harris assists discuss the essential distinctions.

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What does leasehold imply?

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

The number of leasehold houses has actually nevertheless grown over the last few years, particularly with new builds that are offered directly through the developer.

Recent changes to the law

The Leasehold and Freehold Act 2024 is now law, but individual parts of the Act are being executed 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 brand-new leasehold flats, making Commonhold the new default period instead, where each unit-holder owns the freehold of their home.

Learn more about what's altering for leasehold

Main things to know that have been implemented so far are:

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

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