There are two primary types of homeownership in the UK; freehold and leasehold. If you are looking to buy a house or a flat, it is essential to understand the difference, especially if the property is in London where over a third of all homes are leasehold properties.
Whether you’re buying a detached house around Wandsworth, Wimbledon Village or South Wimbledon, or an apartment in Battersea or Putney, you need to know exactly what kind of ownership you’re investing in.
What is the difference between freehold and leasehold? In this article, we’ll break down the terminology and cover some of the things you should look out for if you are buying a leasehold property.
We also share essential facts on the new Leasehold and Freehold Reform Act, which has introduced some positive rule changes for leasehold owners and further provisions are set to follow in 2026 to 2027.
Purchasing a freehold property gives the buyer sole ownership of both the building and the land it sits on.
Most houses we sell in Wimbledon, Wimbledon Village, Coombe Hill, Kingston Hill and elsewhere in South West London are freehold properties.
Owners of freehold homes can make any alterations they wish to the property – as long as they adhere to planning regulations or, if required, obtain Listing Building Consent.
There are no ground rent or service charges to pay, no time limit on your ownership of the property, and freeholders are not reliant on anyone else to maintain the building.
With a leasehold, the buyer owns the property for the period specified in the lease agreement. When the lease ends, ownership reverts to the freeholder. The lease agreement will state the number of years left on the lease.
Although leaseholders own the property’s internal space, fittings, floor and walls, they do not own the land the flat sits on or the fabric of the building, including the roof and external walls. As a result, leaseholders need permission from the freeholder to make alterations or add an extension.
Most flats and apartments that are sold in Wimbledon, Putney and Battersea are leaseholds.
This table provides a comparison of the key differences between freehold and leasehold:
| Feature | Leasehold | Freehold |
| Land ownership | You own the property for the remaining term of the lease but not the land it stands on. The land is owned by the freeholder (landlord). | You own both the property and the land it stands on outright. |
| Typical ongoing costs | May include service charges, buildings insurance contributions (for flats), estate charges and, in some cases, you pay ground rent to the freeholder. | Generally, no ground rent or service charges for a standalone property. |
| Responsibility for building maintenance | The freeholder or management company is usually responsible for maintaining the building and communal areas, with leaseholders contributing through service charges. | The freeholder is usually responsible for maintaining the entire property and the land, including repairs, unless the property is part of a managed development with shared facilities. |
| Time limit on ownership | Yes. Ownership lasts for the length of the lease (for example, 99, 125 or 999 years). | No. Ownership is indefinite and can be passed on, sold or inherited without a lease expiry date. |
Leasehold And Freehold Reform Act: What’s In Force in 2026 (and What’s Still Under Consultation)
On 24th May 2024, the Leasehold and Freehold Reform Act 2024 received Royal Assent and became law in England and Wales. Some provisions have already come into force, while others are still to be rolled out.
Already in force:
Currently under consultation:
In January 2026, a draft Commonhold and Leasehold Reform Bill was published to amend some technical flaws in the 2024 Act that had been highlighted. These additional changes are expected to enter Parliament during 2026 to 2027.
Leasehold properties are a common form of ownership, so there is no need to put off a purchase. However, there are some things you should bear in mind.
Lease length can vary significantly, so this is the first question you should ask about the property before deciding if it’s the one for you.
A flat’s original lease duration is likely to be a long period – often 99 years or 125 years and can be as high as 999 years. As time passes, the period remaining on the lease decreases, so older properties may have much shorter leases.
Ownership of a leasehold home will revert to the freeholder once the lease runs out. Leases with 80 years or fewer are considered short. Anyone buying a flat with a short lease will find it harder to obtain a mortgage.
If you’ve set your heart on a flat with a short lease, you shouldn’t write it off entirely. Government reforms have come into force to make it cheaper and more accessible for leaseholders to obtain lease extensions. For example, the abolition of the 2-year wait for new owners to extend a lease has improved the position for new leasehold homebuyers.
Further cost-reducing changes such as the standardisation of 990-year extensions and marriage value abolition are still pending, but should come into force in the near future.
Most leaseholders obtain a lease extension long before it reaches zero years. Extending a lease can be a complex legal process – though the Leasehold and Freehold Reform Act aims to simplify it. The cost is decided by negotiation between the leaseholder and the freeholder and depends on the property’s value.
Until now, different types of property (flat or house) have benefitted from different standard extension lengths. Currently, standard extension terms are 90 years for flats and 50 years for houses. However, proposed new government legislation could give the leaseholder the right to extend their lease by up to 990 years.
The reforms include set calculation rates to ensure lease extensions are fairer, cheaper and more transparent. The 990-year right and the abolition of marriage value (increase in home value through longer lease extensions) are in consultation phase, with valuation rates being reviewed.
Read more about the costs and process of how to extend your lease.
To cover the costs of maintaining the building’s structure and the development’s communal areas, the landlord or managing agent will impose a service charge.
While fees vary depending on the size of the development, some service charges include contributions to a reserve or sinking fund that is used to cover large one-off bills.
As part of the reform consultations in 2025, the government discussed the need to establish greater transparency around service charges and regulation of managing agents. The outcome and any potential changes are currently pending.
Ground rent is a fee payable to the landlord annually or half-yearly. While it is usually a token payment in the region of £200 or £300 a year, some landlords can charge thousands of pounds each year.
Beware that the landlords of many new-build developments have been inserting clauses into the leases, allowing for dramatic increases in ground rent.
The government has proposed new legislation capping ground rent at £250 a year, reducing to a peppercorn after 40 years; a consultation on implementation closed in April 2026 but this is not yet in force as of July 2026.
It is prevalent for disputes between leaseholders and freeholders to arise. The most common complaint is that the freeholder does not maintain the building to a sufficiently high standard and overcharges for service charges and ground rent. The 2024 legislation aims to make charging structures more transparent, but this will take time to come into effect.
Before buying a leasehold property, try to find out as much as possible about the management company by speaking to the current residents or searching on the internet.
In South West London, the price of a freehold property tends to have a higher value than leasehold properties. However, many houses with long leases sometimes have a price range similar to freehold properties.
The range in price depends on many factors, from the location to the property size. You may not be comparing like with like, so when you buy or sell a home, consider – is my property freehold or leasehold? If it’s leasehold, how many years are left on the lease?
Whilst the price difference between long leasehold and freehold may not be significant, the difference between short leasehold vs freehold can be dramatic. You would only own the property for a limited timeframe and must consider the costs of a lease extension.
Generally, freehold property will be valued higher as this includes ownership of the property and the land, with no costs or work involved in arranging lease extensions in future.
However, leasehold properties with long lease terms of over 100 years will not usually be affected by a decrease in sale value. If you are considering selling a property that has less than 80 years remaining on the lease, you may consider extending your lease to avoid a potential reduction in sale value.
We can provide you with a free valuation to help understand whether the lease length of your property will impact your home’s value.
A leaseholder can buy a share of the freehold together with the other residents of the apartment block. However, the process can be complex and costly.
You’ll have to meet the terms of the Leasehold Reform Act 1967, such as the original lease being granted as a long lease exceeding 21 years. The requirement to wait two years after buying a property before you can buy the freehold was removed from 31 January 2025. This means both individual leaseholders and collective enfranchisements can apply to buy the freehold as soon as the property has been purchased.
Seeking independent legal and financial advice is strongly recommended.
The cost of buying a freehold varies, though it’s sometimes equivalent to an 80-90 year lease extension. The price must be agreed by both parties, or settled independently at a tribunal.
Account for the costs attached to buying a freehold as well, including:
Under the 2024 Act, leaseholders may no longer be obliged to cover the freeholder’s legal fees in every situation. Once the marriage value is abolished, the costs for shorter leases are expected to fall but more information regarding this will be announced to confirm whether this will be the case.
Flying freeholds cover properties that overlap land owned by someone else. Some mortgage providers don’t lend for flying freeholds, so ask questions before taking your application further.
You may encounter a flying freehold on properties that:
Based on your circumstances, you can decide if the price difference between freehold and leasehold represents a good deal. Seek advice, and consider the property alongside the broader pros and cons.
Leasehold bans have already come into effect from 2024 for new build houses and this will also apply to flats in the future, so this should help your decision if you are looking at buying a new build property.
Here are some advantages and disadvantages of a freehold property to consider:
What are the pros and cons of a leasehold property? These positive and negative differences in freehold and leasehold are worth considering:
It’s essential to find the best solution for you, by assessing your own personal and financial circumstances, before deciding if a freehold or leasehold property is for you. Every lease is different, so check the lease terms to avoid any unexpected costs.
Commonhold is an alternative form of property ownership promoted by anti-leasehold campaigners. The building and land are divided into units (for example, flats) and common parts. There is a registered title with the Land Registry for each unit and one for the common elements.
Therefore, the flat owner will own the freehold of the unit, so there will be no time restrictions, as there are with leasehold agreements. The freehold of the common parts is owned by a commonhold association that will manage the building’s communal areas. Unit owners have a right to be members of the commonhold association.
In March 2025, the UK government published commonhold proposals in the Commonhold White Paper, outlining the intention for new flat tenures to be commonhold. Further to this, on 13 May 2026, the planned introduction of the Commonhold and Leasehold Bill was confirmed in the King’s Speech. These reforms are expected to be introduced in the 2026-27 parliamentary session.
If you have any questions about leasehold vs freehold properties, or if you are looking to buy, sell, rent or let a property in the Wimbledon area, contact us today.
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