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If you own the freehold of your home, it implies 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 building or land and must pay ground lease to the freeholder.

Freehold vs leasehold: the crucial distinctions

Do you comprehend what is indicated by a freehold or leasehold residential or commercial property? Experienced estate representative, Ian Harris helps explain the essential distinctions.

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What does leasehold mean?

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

The variety of leasehold houses has however grown in the last few years, specifically with new builds that are offered straight through the designer.

Recent changes to the law

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

Learn more about what's changing for leasehold

Main point to understand 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 buildings can request the right to handle