If you own the freehold of your home, it indicates 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 structure or land and must pay ground rent to the freeholder.

Freehold vs leasehold: the key differences

Do you comprehend what is implied by a freehold or leasehold residential or commercial property? Experienced estate representative, Ian Harris assists discuss the key differences.

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What does leasehold imply?

You are buying a lease from the freeholder for the right to live in the residential or commercial property for a set variety of years. You will not technically own the residential or commercial property outright, the freeholder (or property manager) will continue to own the residential or commercial property and the ground it sits on. Leasehold is prevalent when purchasing a flat or apartment or condo as it sits within a bigger structure.

The variety of leasehold homes has actually nevertheless grown in the last few years, especially with brand-new builds that are offered straight through the designer.

Recent changes 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 everything has actually been done yet. You can see the progress of the changes here. Eventually there will be a ban on the sale of brand-new leasehold flats, making Commonhold the new default period instead, where each unit-holder owns the freehold of their home.

Find out more about what's changing for leasehold

Main things to understand that have been implemented so far are:

- If you own a flat, you can now extend your lease without waiting 2 years initially (as of January 2025).

• This suggests that more leaseholders in mixed-use buildings can request the right to handle