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

Freehold vs leasehold: the key differences

Do you understand what is implied by a freehold or leasehold residential or commercial property? Experienced estate representative, Ian Harris helps describe the key distinctions.

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What does leasehold indicate?

You are buying a lease from the freeholder for the right to reside in the residential or commercial property for a set variety of years. You won't technically own the residential or commercial property outright, the freeholder (or proprietor) will continue to own the residential or commercial property and the ground it rests on. Leasehold is prevalent when purchasing a flat or apartment as it sits within a bigger building.

The variety of leasehold houses has nevertheless grown over the last few years, specifically with new builds that are sold directly through the designer.

Recent modifications to the law

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

Read more about what's changing for leasehold

Main point to know that have actually been implemented so far are:

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

• This indicates that more leaseholders in mixed-use structures can request the right to handle