If you own the freehold of your home, it suggests that you own the building and the land it rests on. If your residential or commercial property is leasehold, you own the residential or commercial property but not the structure or land and need to pay ground rent to the freeholder.

Freehold vs leasehold: the essential differences

Do you understand what is implied by a freehold or leasehold residential or commercial property? estate agent, Ian Harris assists describe the key distinctions.

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What does leasehold indicate?

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

The number of leasehold houses has actually however grown recently, specifically with new builds that are offered directly through the developer.

Recent changes 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 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 altering for leasehold

Main point to understand that have actually been carried out up until now are:

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

• This means that more leaseholders in mixed-use buildings can apply for the right to handle