Quick answer: Freehold vs leasehold comes down to who owns the land. With freehold, you own the property and the ground beneath it outright, indefinitely. With leasehold, you own the right to live there for a fixed number of years, while a separate freeholder owns the land. Freehold is usually straightforward for a mortgage; with leasehold, the number of years remaining on the lease can decide which lenders will consider the property at all.
On this page
- What’s the difference between freehold and leasehold?
- What freehold ownership actually means
- What leasehold ownership actually means
- Freehold vs leasehold at a glance
- How tenure affects your mortgage
- How much lease length do lenders want?
- What to check before buying leasehold
- Extending the lease or buying the freehold
- Commonhold: an alternative worth knowing
- Freehold vs leasehold for buy-to-let
- Frequently asked questions
What’s the difference between freehold and leasehold?
Freehold vs leasehold is ultimately a question of who owns the land. A freeholder owns the property and the ground it stands on, with no time limit and no landlord above them. A leaseholder owns the right to occupy the property for a set number of years under a lease, while a separate freeholder retains ownership of the land itself.
That distinction runs through almost everything else in this article — what you’ll pay, what you’re responsible for, how much control you have, and how a lender views the property.
What freehold ownership actually means
As a freeholder, you’re registered as the outright owner at the Land Registry, with no lease term to think about and no superior landlord to answer to. Most houses in England and Wales are sold freehold.
That said, freehold doesn’t mean unrestricted. Planning rules, building regulations and restrictive covenants can still apply, and some freehold houses on managed estates carry their own estate charges even without a lease in place.
The main practical advantages are straightforward: no ground rent, no need to seek a freeholder’s consent for alterations (beyond the usual planning and building control requirements), and no lease term counting down in the background. The trade-off is that you’re solely responsible for maintaining the whole property, including the roof and external walls — costs that can sometimes be shared among owners in a leasehold building.
Two variations worth knowing: a freehold flat can be harder to mortgage than a freehold house, since responsibility for maintaining the wider building isn’t always clearly defined. A flying freehold is different again — it’s where part of one freehold property physically extends over or under a neighbouring one, which some lenders treat more cautiously.
What leasehold ownership actually means
As a leaseholder, you own the property for the length of your lease — anywhere from a few decades to 999 years — while the freeholder continues to own the land. Most flats in England and Wales are sold this way.
Leaseholders typically pay a service charge toward maintaining shared parts of the building, such as hallways, roofs and communal gardens. Ground rent may also apply on older leases, though for most qualifying new residential leases granted since 30 June 2022, ground rent is restricted to a peppercorn — in effect, no financial payment at all.
Significant alterations usually need the freeholder’s consent, which isn’t guaranteed. And because a lease is a depreciating asset, the property’s value can decline as the remaining term shortens — particularly once it drops below 80 years, the point at which both mortgageability and lease-extension costs start to become more of an issue.
Freehold vs leasehold at a glance
| Freehold | Leasehold | |
|---|---|---|
| Ownership | Property and land | Property only, for a fixed term |
| Costs | No ground rent | Ground rent (where applicable) and service charges |
| Control | Full control, subject to planning law | Restrictions may apply under the lease |
| Mortgage | Generally straightforward | Depends heavily on lease length and terms |
How tenure affects your mortgage
Lenders view freehold and leasehold property differently, even when the sale price is identical. With a freehold, there’s no lease term to factor in — assuming affordability stacks up, the tenure itself rarely complicates the application.
With a leasehold property, the remaining lease term becomes a genuine underwriting factor. Lenders also look at ground rent structure, service charge levels, and how saleable the property is likely to be in future — since they’re ultimately assessing what they’d be able to recover the property for if they ever needed to.
How much lease length do lenders want?
There’s no single industry-wide minimum — each lender sets its own criteria. Common factors include the years remaining now, the years that will remain at the end of your mortgage term, the property type, and whether the property is considered readily saleable.
As a general rule, the shorter the lease, the fewer lenders willing to consider it. Properties with under 80 years remaining tend to see the sharpest drop-off in lender appetite — and that threshold also happens to be where lease-extension costs start climbing more steeply. If you’re looking at a short-lease property, it’s worth checking both the lender’s position and the likely extension cost before you commit to an offer.
What to check before buying leasehold
Before you get legally committed to a leasehold purchase, it’s worth having your conveyancer confirm:
- How many years remain on the lease
- The current service charge, and whether any major works are planned
- Whether a reserve or sinking fund exists
- Whether ground rent is payable, and whether it can increase
- Any restrictions on letting, alterations, or pets within the lease
- Whether the lease terms meet your chosen lender’s criteria
Your conveyancer should review the lease in full before you’re committed to the purchase — this isn’t something to leave until after exchange.
Extending the lease or buying the freehold
This is one of the areas most directly affected by recent legislation. The Leasehold and Freehold Reform Act 2024 is gradually reshaping how lease extensions and enfranchisement work, so it’s worth checking the current position at the time of any claim rather than relying on older guidance.
If a lease has fallen below 80 years, extending it before you buy — or shortly after — can materially improve both mortgageability and long-term value.
Under the current statutory system, qualifying flat owners can generally claim an additional 90 years, and qualifying leasehold house owners an additional 50 years. Since 31 January 2025, leaseholders no longer need to have owned the property for two years before starting a statutory lease-extension or freehold-purchase claim — a change that’s made this more accessible to recent buyers.
The Leasehold and Freehold Reform Act 2024 sets out further changes on the horizon, including 990-year statutory extensions and the removal of marriage value from the premium calculation — though not all of these provisions are in force yet, so it’s worth checking the current position at the time of any claim. Under the system in place today, the 80-year mark still matters, since marriage value can form part of the cost once a lease drops to or below that point.
Leaseholders may also have the right to buy the freehold outright — known as enfranchisement — which removes ground rent entirely and hands back full control, though the legal process can be involved and isn’t cheap. Both routes are worth discussing with a specialist solicitor before you start.
Commonhold: an alternative worth knowing
Commonhold is a less common structure where each unit-holder owns their individual property outright — no expiring lease — while jointly belonging to a commonhold association that manages the shared parts of the building.
There’s no ground rent and no lease term ticking down, which addresses two of leasehold’s most common frustrations. It remains fairly rare in England and Wales today, though government reform is ongoing with the aim of making it more widely used in future.
Freehold vs leasehold for buy-to-let
For landlords, tenure affects more than just the purchase — it shapes ongoing costs and lender choice throughout the life of the investment. Buy-to-let lenders often apply their own thresholds on remaining lease length, service charge levels, and ground rent, sometimes more conservatively than on residential lending.
A lease that’s borderline on length, unusually high service charges, or ground rent above certain thresholds can all narrow the pool of buy-to-let lenders willing to consider a property. Freehold investments tend to offer more long-term flexibility, but every case is different — checking lender criteria before you commit is time well spent either way.
If you’re weighing up how to structure a buy-to-let purchase more broadly, our Buy-to-Let Limited Company guide covers the ownership side in more depth — including how lender criteria and tax treatment differ depending on how you hold the property.
Frequently asked questions
Is it better to buy freehold or leasehold?
Neither is automatically better — it depends on the property type and your priorities. Freehold generally gives more control and fewer ongoing restrictions; leasehold is standard for flats and shared buildings, and can work well with the right lease terms.
Can you get a mortgage on a leasehold property?
Yes, but lenders will look closely at the lease length, ground rent, and service charge structure as part of the application.
What counts as a short lease?
There’s no fixed industry definition, but a lease with fewer than 80 years remaining is generally where mortgageability and extension costs start to become more of a factor.
Can you extend a lease after you’ve bought the property?
Yes, potentially. Since 31 January 2025, qualifying leaseholders no longer need to wait two years of ownership before starting a statutory lease-extension claim. Eligibility still depends on the specific lease, so it’s worth getting legal advice early.
Do leasehold properties lose value over time?
They can, particularly as the term drops below 80 years — though the right lease terms, ground rent structure, and building management can offset this considerably.
