If you own the freehold of your home, it implies 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 however not the building or land and should pay ground lease to the freeholder.

Freehold vs leasehold: the crucial distinctions
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Do you understand what is implied by a freehold or leasehold residential or commercial property? Experienced estate representative, Ian Harris helps describe the key distinctions.

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What does leasehold mean?

You are buying 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 property manager) will continue to own the residential or commercial property and the ground it rests on. Leasehold is commonplace when purchasing a flat or home as it sits within a bigger building.

The variety of leasehold homes has however grown in the last few years, particularly with new builds that are offered straight through the developer.

Recent changes to the law

The Leasehold and Freehold Act 2024 is now law, but private parts of the Act are being executed one at a time so not whatever has actually been done yet. You can see the development of the changes here. there will be a ban on the sale of brand-new leasehold flats, making Commonhold the new default tenure rather, where each unit-holder owns the freehold of their home.
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Learn more about what's changing for leasehold

Main things 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 (since January 2025).

• This implies that more leaseholders in mixed-use structures can get the right to handle