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If you’re considering purchasing your next property, you may already be familiar with the two primary types of property ownership: freehold and leasehold. Each possesses its unique set of characteristics, responsibilities, and implications. In this blog, we’ll explore the critical aspects of purchasing a leasehold property, clarifying the differences between leasehold and freehold to equip you with essential knowledge before making a substantial investment.

Difference Between Freehold & Leasehold

1. Freehold Property:

When you buy a freehold property, you acquire full ownership of both the building and the land it stands on. As the freeholder, you have complete control over the property without any time constraints. This includes the right to use, modify, and dispose of the property as you see fit, subject to local planning regulations. You are also responsible for the maintenance, repairs, and insurance of the property.

2. Leasehold Property:

In contrast, when you purchase a leasehold property, you only own the right to live in the property for a fixed term, known as the remaining lease period. The lease is essentially a contract between you (the leaseholder) and the landlord or freeholder, granting you the right to occupy the property for a specified number of years. However, the land itself remains the property of the freeholder.

Key Aspects of Buying a Leasehold Property

1. Lease Length: The first aspect to consider is the lease length. Short leases (typically under 80 years) can become problematic as they near expiration, affecting the property’s value and making it challenging to secure a mortgage. It is generally advisable to seek leaseholds with extended lease periods.

2. Ground Rent: Leaseholders are required to pay ground rent to the freeholder as a fee for occupying the land. Be aware of the ground rent amount and any provisions for increases over time, as excessive ground rent can impact your finances in the long run. It is important to understand that any ground rent above £250 or £1000 in London will be seen as problematic to some lenders.

3. Service Charges: In addition to ground rent, leaseholders are also responsible for service charges. These charges cover the costs of maintaining and managing shared areas within the property, such as communal gardens, hallways, and lifts. Ensure you understand the service charge breakdown and what services it includes.

4. Leasehold Restrictions: Review the lease carefully to understand any restrictions imposed by the freeholder. Some leases may limit certain activities, such as pet ownership or property alterations, without prior consent, or renting the property.

5. Lease Extension and Enfranchisement: As the lease term diminishes, the property’s value may decline. It’s essential to be aware of your rights to lease extension or collective enfranchisement (purchase of the freehold by a group of leaseholders).

6. Seeking Professional Advice: Buying a leasehold property involves complex legalities. Engaging a qualified solicitor or conveyancer such as Clarity, who is experienced in leasehold transactions can ensure that you navigate the process smoothly and understand all the intricacies involved.


Purchasing a leasehold property can be a viable and rewarding investment, offering access to desirable locations and attractive amenities. However, it is crucial to be well-informed about the specific terms of the lease, ground rent, service charges, and your rights as a leaseholder. Remember, a thorough understanding of the leasehold arrangement will empower you to make an informed decision, ensuring a smooth and rewarding homeownership experience.

Always seek legal advice, conduct due diligence, and carefully review all contractual agreements before committing to buying a leasehold property. By being proactive and well-prepared, you can confidently embark on your journey to become a leasehold homeowner.

Looking for some legal advice?

Our friendly, experienced and responsive team at Clarity are on hand to help you throughout your property purchase. Please contact us to find out more or get a quote. We have offices in Northampton and Milton Keynes and serve the surrounding areas.