Leasehold vs freehold is the first question many UK buyers face — and in 2026 the answer matters more than ever. The two tenures decide whether you own your home outright or for a fixed term, what you pay each year, and how easy it is to sell or mortgage. With the Leasehold and Freehold Reform Act 2024 partly in force and a draft Commonhold and Leasehold Reform Bill published in January 2026, the rules are changing fast. This guide explains the differences, the costs and the reforms — and what to check before you buy.
Freehold means you own both the building and the land it stands on indefinitely. Leasehold means you own the right to live in the property for a fixed term under a lease granted by the freeholder, usually paying ground rent and service charges, with the property reverting to the freeholder if the lease ever expires.
In practice, the difference shapes almost every part of ownership: your running costs, your maintenance responsibilities, your mortgage options and your resale value. GOV.UK’s 2026 leasehold toolkit puts the scale in context: around 5 million homes in England and Wales are leasehold, primarily flats. Scotland uses a different system (most homes are effectively owned outright), so this guide focuses on England and Wales.
As a freeholder, you own the bricks, the roof and the land, with no lease running down in the background. You are responsible for all maintenance and insurance, but you pay no ground rent and answer to no landlord. Most houses are sold freehold, and the Leasehold and Freehold Reform Act 2024 includes a ban (not yet in force) on selling most new houses as leasehold, precisely because leasehold houses were widely seen as unfair.
Freehold is not always spotless: watch for estate management charges on new-build estates, restrictive covenants, and flying freeholds, all of which a good conveyancer and surveyor will flag.
As a leaseholder you buy the remaining term of a lease — commonly 99, 125 or 999 years when first granted. You own the property for that term, but the land and structure typically belong to the freeholder. Alongside your mortgage you will usually pay:
Because the building is shared, defects in the roof or communal structure can land on your service charge bill even though you never use the lift or the loft. That is why a leasehold survey that looks at the whole building — not just your flat — is so valuable.
| Feature | Freehold | Leasehold |
|---|---|---|
| What you own | Property and land, outright | Right to occupy for the lease term |
| Time limit | None | Fixed term, e.g. 99–999 years |
| Typical property | Houses | Flats and maisonettes |
| Ground rent | None | Often payable on older leases; peppercorn on most leases granted since June 2022 |
| Service charges | None (except some managed estates) | Usually payable, can be significant |
| Maintenance | All your responsibility | Freeholder or managing agent maintains the structure; you pay a share |
| Alterations | Subject only to planning and building regulations | Often need freeholder consent |
| Mortgage and resale | Straightforward | Harder and dearer as the lease shortens, especially below 80 years |
Lease length is where leasehold bites. Many lenders want a healthy unexpired term remaining at the end of the mortgage, and a lease under about 80 years triggers marriage value under the current valuation rules — sharply increasing the premium you pay to extend. The Leasehold and Freehold Reform Act 2024 will abolish marriage value when its valuation provisions are switched on, but those sections are not yet in force: the government has said the enfranchisement valuation reforms need technical fixes through further primary legislation, and a consultation on valuation rates is planned for 2026. Until then, the 80-year threshold still matters, and a short lease can make a flat genuinely harder to sell.
One important change is already live: since 31 January 2025, buyers no longer wait two years before claiming a lease extension or buying their freehold — you can start immediately after completion. The standard statutory extension under the 2024 Act, once fully commenced, will be 990 years at a peppercorn ground rent.
The government published the draft Bill in January 2026 and confirmed it in the May 2026 King’s Speech. It proposes to cap existing ground rents at £250 a year, falling to a peppercorn after 40 years, replace forfeiture with a fairer enforcement regime, make converting buildings to commonhold easier, and ban leasehold for most new flats — making commonhold the default tenure for new flats in England and Wales. The Housing, Communities and Local Government Committee reported on the draft Bill on 27 May 2026, welcoming it while calling for strengthening; commentators expect the final Bill to be introduced in autumn 2026. Timings can slip, so treat commencement dates as indicative until regulations are made.
A share of freehold flat is still leasehold: you hold a lease, but you also co-own the freehold with your neighbours, usually through a company. That gives you control over service charges and makes lease extensions far simpler, though the flat itself remains leasehold and the lease still needs to be kept long. If you want to move to this position, our guide to buying the freehold of your flat explains collective enfranchisement step by step.
Commonhold goes further: it is a form of freehold ownership designed for flats, with no lease, no expiry and no ground rent, managed democratically by a commonhold association of the owners. It is rare today but is the government’s intended future for flat ownership under the draft Bill.
Whichever tenure you buy, the building’s condition and the paperwork both need scrutiny:
Use a suitably qualified, accredited surveyor. Survey Merchant’s panel includes surveyors regulated or accredited by recognised UK bodies such as RICS, CIOB and RPSA, matched to the type of property and report you need.
Often, yes. Leaseholders of houses can usually buy the freehold outright, and flat owners can join with neighbours to buy the block’s freehold through collective enfranchisement — or simply extend the lease to protect value. Since January 2025 you can start either claim as soon as you complete your purchase. The right valuation advice matters enormously here: premiums turn on lease length, ground rent and property value, and an accredited valuer’s report is the foundation of any negotiation. Our lease extension service connects you with specialist valuers for exactly this.
Survey Merchant helps buyers and owners across the UK get the right professional advice at the right price:
Ready to protect your purchase? Explore our lease extension service or contact the Survey Merchant team today for a free, no-obligation quote.
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