Published: 05 May 2025

Freehold vs Leasehold Properties

Understanding the difference between freehold and leasehold is essential when buying property.

Freehold

A freehold property means you own both the land and the building indefinitely.

• Full ownership and control.
• No ground rent or service charges.
• Usually more expensive upfront.

Leasehold

A leasehold property means you own the building for a fixed period, but not the land.

• Ownership is temporary and depends on lease length.
• Ground rent and service charges may apply.
• Requires permission for modifications.

Ground Rent Changes

Leasehold Reform (Ground Rent) Act 2022

This law abolished ground rent for most new residential leases granted after 30 June 2022. Landlords who charge ground rent in violation of this act can face fines.

Freehold and Leasehold Reform Act 2024

This introduced a new right allowing leaseholders to extinguish ground rent and replace it with a nominal peppercorn rent. This applies to leases with 150+ years remaining and aims to help leaseholders burdened by escalating ground rents.

Ground Rent Consultation (2023)

The government explored options to cap or freeze ground rents for existing leases, but no final decision has been implemented yet.

Impact on Property Sales

High ground rents have led to lost sales, as some lenders refuse mortgages on properties with excessive ground rent charges.