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

Freehold vs leasehold: the crucial distinctions

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

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What does leasehold mean?

You are acquiring a lease from the freeholder for the right to reside 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 prevalent when purchasing a flat or apartment or condo as it sits within a larger building.

The number of leasehold houses has actually however grown in the last few years, specifically with brand-new builds that are offered directly through the developer.

Recent modifications to the law

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

Learn more about what's altering for leasehold

Main point to know that have been carried out so far are:

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

• This suggests that more leaseholders in mixed-use buildings can use for the right to handle