If you own the freehold of your home, it implies that you own the structure 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 need to pay ground rent to the freeholder.
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Freehold vs leasehold: the crucial distinctions

Do you understand what is meant by a freehold or leasehold residential or commercial property? Experienced estate agent, Ian Harris helps discuss the crucial differences.

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What does leasehold indicate?

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

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

Recent modifications to the law

The Leasehold and Freehold Act 2024 is now law, but individual parts of the Act are being carried out one at a time so not everything has been done yet. You can see the development of the modifications 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.

Read more about what's altering for leasehold

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

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

• This indicates that more leaseholders in mixed-use buildings can obtain the right to manage